Shree Tirupati Balajee Shares Debut with Muted Gains Compared to its GMP

Shree Tirupati Balajee’s shares made their debut on the stock exchanges with a modest start, listing at Rs 90 per share, reflecting an 8.43% premium over the issue price of ₹83. On its first trading day, the stock opened at Rs 92.90 on the BSE, marking a nearly 12% premium. Meanwhile, on the NSE, the shares hit an upper circuit limit of 5% at Rs 94.50, with a massive pending buy quantity of over 40 lakh shares. Despite this demand, the listing performance fell short of the grey market expectations, where shares were trading at a 33% premium before the IPO opened. Let’s dive deeper into the listing performance, the company’s business model, and its financial health.

IPO Performance: Falling Short of Market Expectations

Despite a premium listing, Shree Tirupati Balajee’s shares did not meet the expectations set by the grey market. The grey market, an unofficial platform where shares trade before the official listing, indicated a higher premium of 33%, contrasting with the 12% actual listing gain. Before the IPO launch, the company raised Rs 50.9 crore from six institutional investors, including NAV Capital Emerging Star Fund, Chanakaya Opportunities Fund I, and Next Orbit Growth Fund III through the anchor book.

The IPO, which was open for subscription from September 5 to September 9, helped the company raise approximately Rs 170 crore. Shares were sold within a fixed price band of Rs 78-83, with each lot containing 180 shares. The offer consisted of a fresh issue worth Rs 122.42 crore and an offer-for-sale (OFS) of Rs 47.23 crore. The funds from the fresh issue will be allocated towards debt repayment, working capital requirements, and general corporate purposes, while the OFS proceeds will go to promoter Binod Kumar Agarwal.

About Shree Tirupati Balajee: A Deep Dive into the Company

Originally incorporated as ‘Shree Tirupati Balajee Agro Trading Company Private Limited’ in Pithampur, Madhya Pradesh, the company is engaged in the manufacturing and sale of Flexible Intermediate Bulk Containers (FIBCs), woven sacks, woven fabric, narrow fabric, and tapes. These products cater to both domestic and international markets, making the company a key player in the industrial packaging sector.

Financial Performance: A Steady Climb

Shree Tirupati Balajee has demonstrated strong financial growth in recent years. For the fiscal year ending March 2024, the company reported a significant 74% increase in profit, reaching ₹36 crore, driven by robust operational performance and increased other income. Additionally, the company managed to reduce its other expenses to Rs 70 crore from Rs 85 crore in the previous year.

The company’s revenue for FY24 rose by 13.5% to Rs 540 crore, reflecting steady growth in its business. EBITDA surged by 29% year-on-year, amounting to Rs 62 crore, with margins increasing by 137 basis points to 11.47%. This improvement highlights the company’s strong operational efficiencies and cost management strategies.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.