Tuesday, April 19, 2011

Paramount PrintPackaging IPO - Analysis, Recommendation, Review

Paramount Printpackaging Ltd has entered the capital market with a public issue of 1,30,94,175 equity shares of Rs 10 each. The company aims to raise Rs 45.83 crore through the issue at higher end of price band. The issue will constitute 49.04% of the fully-diluted post issue paid up capital of the company.

The company which now supplies folding-box carton packaging material, has gradually moved from being a stationery printer. Currently promoters from Sukhadia family hold more than 92% stake in the company.

The IPO will open on April 20 and will close on April 25, 2011. The company has fixed the price band at Rs 32-35 per equity share.

The company plans to utilize the proceeds for setting up a new facility for manufacturing high-end duplex board cartons, shippers and printed corrugated box at Gujarat, and for long-term working capital.

Onelife Capital Advisors Private Limited is the book running lead manager to the issue. Share Pro Services Limited is the registrar of the IPO.

Recommendation:
ICRA has assigned Grade 2 to the IPO indicating below average fundamentals. We would not recommend this IPO to the investors.


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