BLS Polymers IPO Day 1: Issue subscribed over 5 times so far, GMP signals 26% listing gain; Check other key details

BLS Polymers Initial Public Offering (IPO) opened for subscription today (October 27) to raise Rs 255 crore, which is entirely a fresh issue of 1.70 crore shares. The IPO was subscribed fully within a few hours of opening, booking more than 5 times so far. The IPO will close the subscription window on October 29. It has set the issue price band between Rs 142 and Rs 150 per share.

BLS Polymers IPO: Subscription snapshot

The issue was fully subscribed within a few hours of opening the subscription window. The subscription was led by the Qualified Institutional Buyers (QIBs), booking the IPO more than 8 times. The retail individual investors segment was booked 3.56 times, while the Non-Institutional Investors booked it over 5 times so far.

BLS Polymers’ share was fetching a grey market premium (GMP) of Rs 39 to the upper price band, which is 26 per cent higher. This hints that the stock might list at around Rs 189 to the issue price, translating to a gain of Rs 3,900 on a single lot. Based on trading activity over the last nine sessions, the premium has fluctuated between a low of Rs 18 and a high of Rs 40.

BLS Polymers IPO: Allotment and listing

The allotment for the IPO is expected to be finalised on October 30, while the listing on the exchanges, NSE and BSE, is likely to be on November 03, as per the tentative schedule.

BLS Polymers IPO: Objectives of the issue

The company will be using Rs 77.56 crore for financing the capital expenditure requirement towards expansion of manufacturing. It will be using Rs 89.50 crore for funding working capital requirements. The remaining amount will go towards general corporate purposes.

BLS Polymers IPO: Lot size

A retail buyer needs to apply for at least one lot that contains 100 shares. The minimum amount of investment required by an individual investor (retail) is Rs 15,000.

BLS Polymers IPO: BRLM and registrar

Unistone Capital is the book running lead manager (BRLM) for the IPO, and Kfin Technologies is working as the registrar of the issue.

The pricing is fair to slightly aggressive relative to pure-play domestic peers like Plastiblends and Ddev Plastiks, said Swastika Investmart. However, the higher valuation multiple is supported by its superior return ratios (ROE exceeding 30%) and expanding EBITDA margins over the past 3 years.

"The IPO may suit investors seeking listing gains or medium-term opportunities, but limited valuation comfort and execution risks make it a moderate-to-high-risk investment," said the brokerage in its IPO note.

BLS Polymers manufactures custom-formulated polymer compounds utilised for sheathing, jacketing, and insulation of wires and cables across the telecommunications, power, and railway industries, alongside protective coatings for underground oil, gas, and water pipelines. The company generates revenue through core manufacturing operations and trading activities involving primary raw materials.

Operating from a single manufacturing facility located in Goa, BLS Polymers caters to domestic clients while also exporting to international markets, including Saudi Arabia and Bangladesh.