Mumbai-based Three M Paper Boards is engaged in the business of manufacturing 100% recycled paper-based coated Duplex Board products used in various packaging applications across industries such as food and beverage, pharmaceuticals, cosmetics, and consumer goods and supplies its high-quality duplex board paper products in both the domestic and international markets, has fixed the price band of ₹67/- to ₹69/- per Equity Share of face value ₹10/- each for its maiden initial public offer. The Initial Public Offering ("IPO" or "Offer") of the Company will open on Friday, July 12, 2024, for subscription and close on Tuesday, July 16, 2024. Investors can bid for a minimum of 2000 Equity Shares and in multiples of 2000 Equity Shares thereafter.
The initial public offering of Rs. 40 crores consist of a fresh issue of 57,72,000 equity shares of Rs. 10 each.
The net proceeds will be utilized for various purposes Rs. 14 crores will be allocated towards capital expenditure, including the purchase of a Plastic-Fired Low-Pressured Boiler, which will use waste plastic for power generation and significantly lower power costs. Additionally, Hot & Soft Nip Calendars will be acquired to elevate product quality, enabling premium pricing and aligning with customer preferences. The funds will also support a factory building extension to increase storage capacity and the acquisition of a sheet cutter to enhance production speed. Rs. 10 crores will be allocated for working capital and Rs. 7 crores for term loan repayment, which will smoothen operations, improve cash flow management, and lower interest costs. The remaining funds will be used for general corporate purposes and issue expenses.
Three M Paper Boards Limited, headquartered in Mumbai, was established in July 1989 by Mr. Hitendra Dhanji Shah, who has over three decades of experience in the paper industry. The company produces 100% recycled paper by using biodegradable products and is committed to continuous innovation in both product development and manufacturing processes.
Given India's current per capita paper consumption, the company foresees significant opportunities ahead. The rise of e-commerce, increasing literacy rates, and the growth of the FMCG, packaged food, and stationery industries suggest a promising future for the Indian paper industry, which is expected to outpace global growth. Despite the trend toward digitization, the Indian paper industry is projected to achieve double-digit growth over the next five years. Additionally, changes in Chinese import policies have positively impacted Indian mills that consume waste paper, boosting the industry further. With these favorable conditions, the company remains optimistic about the industry's prospects.
Three M Paper Boards Limited attributes its success to its strategic focus on being a low-cost paper manufacturer and its ongoing integration of new technologies and processes. To accelerate this transition, the company is setting up a new 400 TPD Duplex Machine. This decision is driven by increasing demand for the product and the company's expertise in this segment. The project, estimated to cost Rs 400 crore, will be funded through a combination of debt, internal accruals, and equity participation.
The company's manufacturing facility is located in Chiplun, Maharashtra, equipped with state-of-the-art machines and modern technologies, with a total manufacturing capacity of 72,000 TPA as of FY 2023-24. The facility is well-connected by both rail and sea, with a broad-gauge railway line on the Mumbai-Trivandrum section and proximity to Jaigarh Port. This connectivity ensures cost-effective transportation and streamlined operations for both imports and exports, facilitating strategic planning for export activities, potentially increasing export volumes, and expanding market reach.
For fiscal 2024, Three M Paper Boards Limited reported total revenue of Rs 276.01 crore. Profit after tax increased by 71.53%, reaching Rs 11.34 crore compared to Rs 6.61 crore in fiscal 2023.
The Issue is being made through the Book Building Process, wherein not more than 50% of the Net Issue shall be available for allocation to Qualified Institutional Buyers, not less than 15% of the Net Issue shall be available for allocation to Non-Institutional Investors and not less than 35% of the Net Issue shall be available for allocation to Retail Individual Bidders.
Comfort Securities Limited is the sole book-running lead manager and Bigshare Services Private Limited is the registrar of the offer. The equity shares are proposed to be listed on SME Platform of BSE Limited (BSE SME). |
