Subam Papers IPO: Investing in Sustainable Paper Manufacturing

Table of Contents

Introduction to Subam Papers Limited IPO

Subam Papers Limited, the name itself resonates with the world of sustainable paper-making. It is going to make its note in the investor community as its SME IPO is all set to be introduced. Subam Papers Limited, which originated from Tamil Nadu back in 2004, has been a leader by offering eco-friendly Kraft Paper and Duplex Board, recycling waste into the finest products.

Company Details of Subam Papers Limited

Starting with the production of paper cones, Subam Papers expanded into the manufactures of Kraft Paper and Duplex Board, which are frequently used in packaging and industrial services. The operation philosophy of the company is a recycling approach using waste paper as raw material. With this aspect, it can save this company from several elements of cost as this company can minimize production costs according to global sustainability goals.

Subam Papers Limited IPO Details

IPO Date: Subam Papers to mobilize Rs 93.70 cr through issue
The Subam Papers IPO subscription will be open from 30 September, 2024 to 3rd Oct, 2024.
The Price Band has been decided as ₹144 to ₹152 per Equity Share.
The size of the issue is a fresh issue of 61.65 lakh Equity Shares to raise around ₹93.70 crore.

The net proceed shall primarily utilize all funds in a capital expenditure with its subsidiary and general corporate purposes.

Here are the key dates for the Subam Papers Limited IPO in a tabular format:

Event	Date
IPO Opens	September 30, 2024
IPO Closes	October 3, 2024
Allotment Finalization	October 4, 2024
Listing Date (Tentative)	October 8, 2024

Here’s the table updated with the details for Subam Papers Limited IPO:

IPO Details	Information
Company Name	Subam Papers Limited
IPO Size	₹93.70 crore
New Issue	₹93.70 crore (61.65 lakh equity shares)
Price Band	₹144 – ₹152 per share
Face Value	₹10 per share
Listing Exchange	BSE SME
Minimum Bid Lot	800 shares
Minimum Investment	₹121,600 (at the upper price band)
Issue Type	Book-built Issue
Issue Category	SME IPO
QIB Allocation	50%
NII Allocation	15%
Retail Allocation	35%
Company Sector	Paper Industry (Kraft Paper and Duplex Board)

Subam Papers Limited IPO Financial Analysis

For the fiscal year ending March 2024, Subam Papers reported a revenue of ₹49,697.31 lakhs and a net profit of ₹3,341.80 lakhs. The commitment of this company towards sustainability does not stop at products alone but also reflects in its ability to showcase good health in the financial aspect as well, with a capacity utilization that seems quite in line with its growth trajectory.

Comparison Table for Recent Financial Year Data:

Financial Metric	Fiscal Year Ending March 31, 2024	Fiscal Year Ending March 31, 2023	Change %
Assets	₹46,046.10 L	₹41,434.65 L	11.1%
Revenue	₹49,697.31 L	₹51,062.36 L	-2.7%
Profit After Tax	₹3,341.80 L	₹-26.79 L	N/A (+12574% relative to 2022)
Net Worth	₹ 19,904.12 L	₹ 16,562.32 L	17.7%
Reserves & Surplus	₹19,741.35 L	₹16,399.55 L

Subam Papers Limited’s three fiscal years ended March 2022 to March 2024 actually reveal some interesting trends:

Assets: There is steady growth here since assets increased from ₹39,418.33 lakh in 2022 to ₹46,046.1 lakh in 2024 and might represent expansion or higher value valuation of assets.
Revenue: There is value growth from 2022 to 2023, but revenue actually declined by -3% over the same period, from 2023 to 2024, which could be market or operational adjustments.
Profit After Tax (PAT): The most spectacular swing, however was that in PAT, where it swung from loss of ₹ -26.79 lakhs in FY 2023 to profit of ₹3,341.8 lakhs in FY 2024 at an increase of 12574%, which could be a turnaround either on operational efficiencies or profitability.

Net Worth and Reserves-Increased steadily in the year indicating rising earnings or capital.

Total Borrowings Increased in the last three years. This could be on account of expansion plans or for working capital needs.

Subam Papers Limited IPO GMP and Subscription

In detail, using information available and gathered from various sources, the overview of Subam Papers Limited IPO with respect to GMP -Grey Market Premium- and their subscription status is as follows:

GMP Changes: As of September 27, 2024, GMP for Subam Papers IPO was quoted at ₹0. By September 29, 2024, the GMP gained to ₹35, which will amount to a 23% premium over the issue price of ₹152 per share. That’s an interesting swing in GMP for this IPO towards the end of September.
Subscription Status: On its opening day, 30 September 2024, the IPO witnessed a rather lukewarm response with a subscription rate of merely 0.36 times. That reflects that demand for shares was quite low compared to what is on offer, reflecting perhaps a rather cautious market sentiment or maybe even a lack of aggressive marketing and/or investor awareness.
IPO Details Recap
Price Band: ₹144 to ₹152 per share.
Issue Size: Issue of ₹93.70 crore with a fresh issue of 61,650,000 equity shares. No offer for sale.
Subscription Period: September 30 to October 3, 2024.
Listing Details: BSE SME listing expected on October 8, 2024.

The swing of GMP in the range of ₹0 to ₹35 in a few days itself reflects dynamic market sentiments. While an initial shortfall in premium could suggest some skepticism or lack of interest, the later surge can be construed as due to positive word of mouth, better market understanding of the company’s fundamentals or speculative trading in the grey market.

Investment Considerations: the slight GMP and fairly low initial subscription may point to whether investors are still careful at such low levels of subscription, waiting for stronger signals or be an opportunity to grab value if low subscription leads to better allocation chances. However, the GMP also goes along with an optimism or expectation for listing gain to some extent.
Conclusion on GMP and Subscription: This is a story where GMP has gone from zero to ₹35, all within a matter of days, and muted subscription rates. It can turn out to be a bargain for investors, if they feel assured about listing gains, or are hesitant and await a better opportunity while this one disappears. This again proves how IPO markets are highly volatile with perception and education on the investor’s end capable of a drastic shift in scenario.

Remember, while GMP can provide insights into the sentiment of the market, it does not in any way guarantee listing gains or long

Subam Papers Limited IPO EPS and PE Ratio

Subam Papers Limited IPO EPS and PE Ratio:

EPS (Earnings Per Share):
- Based on the financial performance for the fiscal year ending March 31, 2024, Subam Papers reported an EPS of ₹20.53. This calculation is based on the earnings for that year divided by the number of shares outstanding.
PE Ratio (Price to Earnings Ratio):
- Using the upper price band of ₹152 per share from the IPO, the PE ratio based on the FY24 EPS would be:PE Ratio=Share PriceEPS=15220.53≈7.40
- Considering a weighted EPS over the last three years, which was mentioned as ₹12.87, the PE ratio would be:PE Ratio=15212.87≈11.81

Key Points from Analysis:

Investor Sentiment and Valuation: The low PE ratio, especially when compared to industry peers.

Market Valuation: The PE ratio suggests that, at the IPO price, Subam Papers is modestly priced compared to its earnings, especially when looking at the single-year EPS, indicating potential value for investors if the company sustains or grows its earnings.

How to Invest in Subam Papers IPO

Lot Size: The minimum investment will be in the form of 800 shares, that is an amount of ₹1,21,600.
Process: Apply online or through your broker and pay close attention to the application dates and processes.

Sustainability Impact

Subam Papers goes truly unique from the competition in terms of its approach to recyclable waste use and renewable energy sources used such as wind and solar; they present a company that is perceived to be environmentally friendly and will attract those investors who want something more environmentally conscious.

Conclusion: Why Subam Papers IPO Matters

Subam Paper Limited’s IPO represents a valuable investment opportunity for anyone seeking to be associated with a leading player in the greener way of paper-making. That’s why this particular IPO may well prove to be the most remarkable one:

Sustainability and Innovation: Subam Paper’s commitment to producing an eco-friendly Kraft Paper and Duplex Board sets it ready for an emerging market of sustainable products. This appeals not only to the environmentally conscious investor but also taps the growth demand globally on the trend toward sustainability.
Financial Health and Market Position The financials of the company can present minor fluctuations, but there is strong growth potential. This can be attributed to huge production capacity along with operational efficiency. This positive EPS and reasonable P/E ratios reflect the possibility that this stock might be reasonably priced in respect to sector growth prospects.
Investment in Growth: The post-IPO funds are utilized to raise production capacity and general corporate purposes. Investment in growth is a strategic growth expansion intended to gain more market share or enhance operational efficiencies.
The Grey Market Premium fluctuation between 26 percent and over 30 percent suggests that there is a lot of investor interest, but the GMP doesn’t promise listing gains every time, and it’s a good barometer of the market sentiment, which could be a positive indication to an investor.
Expert Views: While there’s mixed advice, the general advice appears to be on the positive side, particularly as far as listing potential is concerned. This may be due to the niche market position and the sustainable ethos of Subam Papers.
Strategic Investment: For the investor, Subam Papers IPO holds much more than it may seem to be moolah-the potential long-term value accretive exercise beyond the listing gain from the immediate exercise itself.

It is different from most IPOs in that it not only indicates a company’s market positioning within a niche yet growing sector but also helps it align with sustainable practices, potentially appealing to a broad range of investors those seeking short-term returns and those looking at longer-term ethical investments. That being said, this IPO might almost be a beacon for anyone who is interested in blending financial returns with environmental responsibility. However, like all investments, due diligence and thought must be given to one’s investment strategy before one jumps into this, or any other, IPO.