HP Adhesives IPO

 

Hp Adhesives is a fast-growing retail adhesives and sealants firm with a wide range of products and categories. They are one of the major manufacturing businesses in India in the consumer/ bazaar section of the adhesive market for their biggest product class PVC solvent cement. HP Adhesives IPO will hit the market in 15 December 2021.

Products

Hp Adhesives produce a broad variety of client adhesives and sealants, including PVC, cPVC, and uPVC solvent cement, synthetic rubber adhesive, PVA adhesives, silicone sealant, acrylic sealant, gasket shellac, other sealants, and PVC pipe lubricant, which are sold throughout India and exported to many nations through a network of partners.

On a case-by-case basis, they also manufacture similar goods for a few big PVC pipe manufacturers under co-branding or private label.

Other Products & Sectors

Apart from the aforementioned items, they also provide auxiliary products such as ball valves, thread seal and other tapes, and FRP materials for drainage and architectural services, which are delivered through their distribution network alongside their items to end-customers.

Plumbing and sanitary, drainage and water distribution, general purpose building/construction and interior operations, and also glazing operations, woodwork, footwear, automobile, foam-furnishing, and other diverse sectors, all use the mentioned adhesives and sealant materials.

Business Model

They have a solid business plan that aims to continually grow their product portfolio by launching new product segments and SKUs to cater to a wide range of end-use applications and sell them through their distribution network throughout India.

They have a well-established brand image thanks to their strong emphasis on product excellence and long-standing track record in the distribution network, which supports them in entering new market segments. 4

They connect with their distributor network on a regular basis through marketing and promotional efforts, as well as host a variety of events including distributor meetings, retailer meetings, and plumber and carpenter meetings, all of which help to promote their product brands.

Distribution Network

As of June 30, 2021, their distribution network in India consisted of four warehouses and over 750 distributors serving over 50,000 dealers.

Their sales staff collaborates closely with their partners and end-users to get information and input on emerging industry trends, allowing them to build an efficient product development, sales, promotion, and pricing policy.

Manufacturing Facility

They are now functioning out of their multi-product production plant located in Village Narangi, Raigad (Maharashtra) as of June 30, 2021.

Their production plant is ideally positioned near the Jawaharlal Nehru Port Trust (JNPT), India’s largest container handling port, through where they get supplies of imported raw materials and distribute to the international market.

They want to increase its manufacturing capacity in Village Narangi, Raigad, Maharashtra, to meet rising demand for a variety of products.

HP Adhesives IPO

Hp Adhesives, headquartered in Mumbai has submitted Draft Red Herring Prospectus(DRHP) to Securities and Exchange Board of India(SEBI) for initial public offering (IPO) of 45,97,200 Equity Shares on 18 July, 2021.

There will be fresh issue of 41,40,000 Equity share & OFS (Offer for sale) of 4,57,200 equity shares from existing Promoters mentioned in the DRHP of the company.

They got approval from Securities and Exchange Board of India(SEBI) to float the initial public offering (IPO) in the market on 26 October 2021.

Financials Trends

Particulars	For the year/period ended ( in Cr.)
		31-Mar-21	31-Mar-20
Total Assets		89.78	56.81
Total Revenue		123.88	86.83
Profit After Tax		10.06	(4.73)

Basic and Diluted Earnings Per Share (EPS)

Financial Period	Basic EPS (in INR)	Diluted EPS (in INR)	Weight
Financial Year 2021	7.74	7.74	1
Financial Year 2020	(3.64)	(3.64)	2

Note:

On May 07, 2019, their company was changed from a partnership to a private limited company, and FY 2020 covers the period from May 07, 2019 to March 31, 2020. As a result, neither of the aforementioned financial periods may be given any weight.

Objects of the Issue

• Prepayment / repayment of all or a portion of the outstanding borrowings of the company to be availed on consolidated basis.
• To meet common corporate objectives.

Basis of The offer

The following are few of the qualitative parameters that go into determining the Offer Price:

• A diverse product line that caters to the demands of a wide range of clients across the industry.
• Promoters with subject understanding, as well as a competent management staff.
• Sales and distribution chain is substantial.
• Production plants that are strategically situated.
• Enhancing operational effectiveness.

HP Adhesives IPO Peer Comparison

S. No.	Company Name	PE
1	Pidilite Industries Limited	81.28

HP Adhesives IPO Details

IPO Opening Date	15 December 2021
IPO Closing Date	17 December 2021
Issue Type	Book Built
Face Value	10 per  share
IPO Price	INR 262 to 274 per equity share
Market Lot	50
Min Amount	INR 13,700
Listing At	BSE, NSE
Issue Size	45,97,200 Equity Shares
Fresh Issue	41,40,000 Equity Shares
Offer for Sale	4,57,200 Equity Shares

HP Adhesives IPO Dates

HP Adhesives IPO opening date is 15 December 2021, and the closing date 17 December 2021. The issue may list in 27 December 2021.

IPO Open Date	15 December 2021
IPO Close Date	17 December 2021
Basis of Allotment Date	22 December 2021
Initiation of Refunds	23 December 2021
Credit of Shares to Demat Account	24 December 2021
IPO Listing Date	27 December 2021

Basis of Allotment

Type	% of Offer	Basis of Allotment
Qualified Institutional Buyer	75	Roughly  equivalent
Non Institutional Investor	15	Roughly  equivalent
Retail	10	Minimum level of 1 lot, based on availability, for every shareholder.

HP Adhesives IPO Allotment Status

Allotment of equity stocks subject to the Fresh Issue and transfer of the Promoter Selling Shareholders’ OFS Stocks to the winning Bidders subject to the Offer for Sale. Nevertheless, the status of the allotment has yet to be revealed.

Here, you can find the Allotment Status of HP Adhesives IPO.

HP Adhesives IPO GMP

HP Adhesives IPO Grey Market Premium is INR 46.

Date	GMP (in Rs)	Subject to Sauda	Kostak (in Rs)
26 December 2021	46	3900	450
25 December 2021	35	2800	350
24 December 2021	28	2100	300
23 December 2021	50	2300	350
22 December 2021	NO Trade	NO Trade	NO Trade
21 December 2021	NO Trade	NO Trade	NO Trade
20 December 2021	NO Trade	NO Trade	NO Trade
19 December 2021	39	1200	150
18 December 2021	50	1700	200
17 December 2021	NO Trade	NO Trade	NO Trade
16 December 2021	NO Trade	NO Trade	NO Trade
15 December 2021	NO Trade	NO Trade	NO Trade
14 December 2021	NO Trade	NO Trade	NO Trade
13 December 2021	NO Trade	NO Trade	NO Trade
12 December 2021	150	3400	350
11 December 2021	170	1200	100
10 December 2021	190

HP Adhesives IPO Review

Hp Adhesives IPO Review will depend on Price band. Once the price band will be issued we will update the Review for this IPO.

HP Adhesives IPO Risk

• Certain legal procedures have been filed against their company, its promoters, and directors. Any negative outcome of these actions might have a negative effect on the business.
• Their projected capacity increase initiatives for their manufacturing plant are vulnerable to unforeseen implementation difficulties and cost overruns.
• The COVID-19 pandemic’s influence on their company and operations is still unknown.
• They do not engage into long-term agreements with their distributors, and any failure to maintain their current relationships might have a detrimental impact on the operations.
• Their production capacity may be underutilised, which might have a negative impact on their business.
• Their business has had losses in the past.

Other Threats

• The western zone accounts for a major percentage of their domestic sales, and any negative developments in this region might have a negative impact on their business.
• Failure to maintain, strengthen, and enhance their current brand might have a negative impact on their business.
• They operate in a very competitive industry, and any inability to compete successfully might have a significant negative impact on them.
• Certain contingent liabilities are disclosed in their restated financial statements, which, if realised, might have a negative impact on their company.
• Any unplanned or extended interruption of their manufacturing activities might have a substantial and negative impact on their company.

HP Adhesives IPO Brokerage views

• Yes Securities : Not Updated
• Choice Brokering: Not Updated
• Axis Securities: Not Updated
• IIFL Securities: Not Updated
• Trade swift: Not Updated
• Anand Rathi : Not Updated
• ICICI Securities: Not Updated

HP Adhesives IPO Subscription Status

Date	Day	QIB	NII	Retail	Employees	Total Subscription
15 December 2021	1	0.00	0.38	18.57	N/A	3.48
16 December 2021	2	0.34	1.90	40.29	N/A	8.03
17 December 2021	3	1.82	19.04	81.24	N/A	20.94

Promoters

1. Mrs. Anjana Haresh Motwani
2. Mr. Karan Haresh Motwani

Promoters Holding

Pre Issue Share Holding	95.31%
Post Issue Share Holding

HP Adhesives IPO Prospectus