Paramesu Biotech IPO Details: Launch Date, Share Price, Size & Review

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Paramesu Biotech IPO Details: Launch Date, Share Price, Size & Review

Business Profile of the Paramesu Biotech Limited

Paramesu Biotech is a leading manufacturer of maize-based speciality products in India, with an installed capacity of 800 TPD. They offer a diverse portfolio of products, including native maize starch, modified starches, liquid glucose, maltodextrin powder, and co-products. With a capacity utilization of 93.09%, they are one of the few companies in the country specializing in different types of modified starches. The company operates in Devarapalli, Andhra Pradesh, and has a strong presence in both domestic and international markets.

They have exported their products to over 10 countries across South East Asia and the Middle East. The company’s Devarapalli facility, located in Andhra Pradesh, is strategically located near primary sources of raw materials and major transport routes.

Paramesu Biotech Limited IPO Objective

As per the draft red hearing prospects, the IPO issue consists only of offer for sale.

  • The OFS consists of up to XXXX Equity Shares aggregating up to Rs. 800 million. Nothing from those proceeds of OFS will be allotted to company.
  • Paramesu Biotech IPO offer only has fresh issue of Rs. 6, 000 million. As per DRHP document, the company aims to utilize IPO proceedings towards capital expenditure for setting new plant, payment of certain borrowings and corporate general purposes.

Issue Price & Size: Paramesu Biotech Limited IPO

The issue price of Paramesu Biotech Limited hasn’t been released yet. Upon releasing the dates, the investors can bid between those price ranges. The company has both fresh issue of Rs. 440 crores as well as offer for sale of Rs. 1060 crores.

Launch Date of Paramesu Biotech Limited IPO

The IPO opening date of Paramesu Biotech hasn’t been officially announced yet, upon the declaration of dates investor can bid for IPO.

Should You Subscribe to Paramesu Biotech Limited IPO or Not

While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.

Competitive Strengths of Paramesu Biotech Limited:

Leading manufacturer

The company is a leading manufacturer of maize-based speciality products in India. The company offer diverse product portfolio including native maize and modified maize starches, liquid glucose, maltodextrin powder, and many more products.

Over the years the company has expanded its offerings, established a strong market position side-by-side focusing on quality. Because of which, the company has established a presence domestically and abroad. The maize-based speciality products industry faces high entry barriers, including capital costs, lead time, and limited availability of raw materials. The company has certified its Devarapalli facility in accordance with various standards, making it the fourth largest company in India.

The company’s B2B nature also creates substantial exit barriers for customers, leading to a preference for continuity with existing suppliers.

Diversified customer base

The company’s growth is directly linked to the expansion in end-user industries. Over the years the company has diversified its customer base by introducing new products careering to different industry clients. Paramesu Biotech is one of the few companies in India specializing in different types of modified starches.

These products are used in variety of places like ingredients, thickening agents, stabilizers, sweeteners, emulsifiers, etc. The company’s growing presence in international markets and ability to adapt to market demands further solidifies its position as a global player.

Strategically located manufacturing plant

Companies manufacturing facility in Andhra Pradesh is strategically located with ample scope for expansion. At present, the Deverapalli facility has an aggregate installed capacity of 800 tons per day. Facility’s access to and sustainable source of water reducing reliance on external water supply systems. At the same time, the facility benefits from supply chain efficiencies, because it is less than 100 km from Kakinada port and under 250 km from Visakhapatnam port. The strategic location helps in reducing transportation costs for distribution of products to domestic and international markets.

The company also has two silos for storage facility for storing its raw material and dedicated storage spaces for finished goods with a total capacity of 7,500 MT.

Consistent capability building

Company’s currently operated manufacturing facility in Deverapalli has capacity utilization of 93.34% as of September 30, 2024. The company has experienced continuous growth in capacity, with capital expenditure and gross block increasing over the years. The company’s experience of strategically adding capacity and commitment to capital efficiency has resulted in one of the highest PAT margins among peers in Fiscal 2024.

If the company keeps relying heavily on repeat customers for most of its revenue and fails to diversify and expand, then their operation and finances may stagnate.

Future plans

  • Augment capacity by setting up a new manufacturing facility in Central India
  • Expand global presence
  • Increase revenue contribution from derivative and value added product
  • Focus on production efficiencies and streamlining costs
  • Focus on deleveraging and enhance financial flexibility

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