Pyramid Technoplast IPO subscribed 18.29 times at close

Pyramid Technoplast IPO worth ₹153.05 crore, consisted of a combination of fresh issue and offer for sale. The fresh issue was to the tune of ₹91.30 crore while the offer for sale (OFS) was worth ₹61.75 crore. The IPO pricing was done in the band of ₹151 to ₹166 with the final price to be discovered through the process of book building. All the 3 segments viz. the QIB portion, HNI / NII portion and the retail portion got fully subscribed on the first day of the IPO itself. However, all the 3 categories above showed very good traction on the last day of the IPO, which is August 22, 2023. The IPO overall was fully subscribed on the first day of the IPO itself.

There is some important information for the anchor investors in the IPO in terms of relevant dates as explained in the table below.

We will look at the anchor allocation in detail in the QIB allotment segment.

Quick update on the overall Pyramid Technoplast IPO response

Pyramid Technoplast IPO saw fairly steady response on Day-1 and Day-2 of the IPO and closed with rather healthy subscription numbers at the close of Day-3. In fact, the company got fully subscribed on the first day of the IPO itself. As per the combined bid details put out by the BSE at the close of Day-3, Pyramid Technoplast Ltd IPO was subscribed 18.29X overall, with best demand coming from the HNI / NII segment, followed by the retail segment and the QIB (qualified institutional buyer) segment in that order. In fact, the institutional segment saw some very good traction on the last day. The HNI portion did do well and a lot of the surge of funding applications and corporate applications did come in on the last day of the IPO. Retail portion got fully subscribed on Day-1 and built up heft gradually. Firstly, let us look at re the details of overall allocation.

As of close of 22nd August 2023, out of the 75.60 lakh shares on offer in the IPO, Pyramid Technoplast Ltd saw bids for 1,382.86 lakh shares. This implies an overall subscription of 18.29X overall. The granular break-up of subscriptions was in favour of the HNI / NII investors followed by the retail investors while the QIB portion got the lowest subscription among the various categories. QIB bids and NII bids typically gather most of the momentum on the last day, and that was the case in this issue also in the case of QIB bids. Both the QIB and the NII bids picked momentum on the last day and added to its heft of the previous days. Here are the details of the category-wise subscription.

Subscription status of QIB Portion

Let us first talk about the pre-IPO anchor placement. On 17th August 2023, Pyramid Technoplast Ltd completed the bidding for its anchor allocation. There was a sound response as the anchor investors participated through the process of book building. A total of 16,59,600 shares were allotted to a total of 4 anchor investors. The allocation was done at the upper IPO price band of ₹166, which includes the face value of the share at ₹10 per share and the premium of ₹156 per share. This resulted in an overall allocation of ₹27.55 crore to these 4 anchor investors. The anchors have absorbed 18% of the total issue size of ₹153.05 crore, which is indicative of fairly robust institutional demand.

Listed below are the 4 anchor investors who got allotted the full 100% of the total anchor allocation quota for the Pyramid Technoplast IPO. The entire anchor allocation of ₹27.55 crore was spread across these 4 major anchor investors. These 4 anchor investors listed below accounted for 100% of the total anchor allocation of Pyramid Technoplast IPO.

Data Source: BSE Filings

The QIB portion (net of anchor allocation as explained above) had a quota of 11.06 lakh shares of which it has got bids for 110.01 lakh shares at the close of Day-3, implying a subscription ratio of 9.94X for QIBs at the close of Day-3. QIB bids typically get bunched on the last day and while the heavy demand for the anchor placement had given an indication of the institutional appetite for the Pyramid Technoplast Ltd IPO subscription overall, the actual demand did turn to be less robust than expected for the QIB portion of the IPO.

Subscription status of HNI / NII Portion

The HNI portion got subscribed 32.24X (getting applications for 594.41 lakh shares against the available quota of 18.44 lakh shares). That is a very strong response at the close of Day-3 largely because this segment normally sees the maximum response bunched on the last day. Bulk of the funded applications and corporate applications, come in on the last day of the IPO, and that was visible as the overall HNI / NII portion added to its heft on the last day of the IPO. While the demand for the QIB portion was relatively subdued, HNIs saw good traction on the last day.

Now the NII/HNI portion is reported in two parts viz. bids below ₹10 lakhs (S-HNI) and bids above ₹10 lakhs (B-HNI). The bids above the ₹10 lakh category (B-HNIs) typically represents most of the major funding customers. If you break up the HNI portion, the above ₹10 lakh bid category got subscribed 33.81X while the below ₹10 lakh bid category (S-HNIs) got subscribed 29.09X. This is just for information and is already part of the overall HNI bids explained in the previous para.

Subscription status of Retail Individuals

The retail portion was subscribed just 14.72X at the close of Day-3, showing steady to strong retail appetite. It must be noted that retail allocation is 35% in this IPO. For retail investors; out of the 46.10 lakh shares on offer, valid bids were received for 678.44 lakh shares, which included bids for 559.95 lakh shares at the cut-off price. The IPO is priced in the band of (₹151 to ₹166) and has closed for subscription as of the close of Tuesday, 22nd August 2023.

Read about Pyramid Technoplast Ltd

Brief on the business model of Pyramid Technoplast Ltd

Pyramid Technoplast Ltd was incorporated in the year 1997 to manufacture polymer-based molded products. Better known as Polymer Drums, they are principally used for packaging in industries like chemicals, agrochemicals, specialty chemicals, and pharmaceutical sectors. Some of its key products include polymer-based bulk packaging drums and Intermediate Bulk Containers (IBC). It also specializes in the manufacture of MS Drums for packaging and transporting of volatile chemicals, agrochemicals, and specialty chemicals. It currently has 6 manufacturing units, of which 4 are located in GIDC, Bharuch while the other 2 are located in Silvassa, Dadra & Nagar Haveli. Pyramid Technoplast Ltd has total polymer drum manufacturing capacity of 20,612 MTPA, IBC manufacturing capacity of 12,820 MTPA and MS Drums manufacturing capacity of 6,200 MTPA. It is currently foraying into building its seventh plant, also in GIDC, Bharuch.

The company is certified by the UN based on the United Nations Recommendation for IBC and MS Drums to meet safety levels. Its business is broadly divided into the IBC Containers vertical, MS Barrels vertical and the Plastic Barrels vertical. Some of the premium clients of Pyramid Technoplast for its polymer based packaging solutions include Gujarat Alkalis & Chemicals Ltd (GACL), Deepak Nitrite, United Phosphorus (UPL), Patanjali Group, Adani Wilmar Ltd, Apar group, Alkyl Amines, Asian Paints and the JSW Group, owned by the Jindal family.

The issue will be lead managed by PNB Investment Services Ltd and First Overseas Capital Ltd. Bigshare Services Private Ltd will be the registrar to the issue.