Business Profile of the Manjushree Technopack Limted
Manjushree Technopack established in 1987, has grown significantly over the past three decade, becoming the largest rigid plastic packaging player in India. The company serves a wide range of customer and has expanded its product categories and production capabilities, diversifying its industries from food and beverages to paints, agrochemicals, and automotive. They are one-stop packaging solutions provider offers end-to-end capabilities across containers, preforms, caps and closures, pumps and dispensers, and captive recycling capabilities.
The company has completed five strategic acquisitions since 2018. They have a well diversified customer base of 964 customers includes Varun Beverages, Dabur India, Marico, Hershey India etc.
The Main Objectives to Launch the Manjushree Technopack Limted IPO
As per the draft red hearing prospects, the IPO issue consists of both Offer for sale and fresh issue by the company.
- The OFS consists of up to [●] equity shares aggregating up to Rs. 2250 crores. Nothing from those proceeds of OFS will be allotted to company.
- Manjushree Technopack IPO offer also has a fresh issue of Rs. 750 crores, of which Rs. 500 crores will be used for payment of borrowings and rest of the amount will be used for acquisitions & general corporate purposes.
| Particulars | Amount to be funded from the Net Proceeds | Amount to be deployed in Fiscal 2025 | Amount to be deployed in Fiscal 2026 |
| Repayment of outstanding borrowings availed by Company | 5,000.00 | 5,000.00 | - |
| Funding inorganic growth through acquisitions and general corporate purposes | [●] | [●] | [●] |
| Net Proceeds | [●] | [●] | [●] |
IPO Details of Manjushree Technopack Limted:
| IPO Open Date | N.A. |
| IPO Close Date | N.A. |
| Basis of Allotment | N.A. |
| Listing Date | N.A. |
| Face Value | ₹2 per share |
| Price | N.A. |
| Lot Size | N.A. |
| Total Issue Size | Up to [●] Equity Shares |
| Aggregating up to ₹ 30,000 million | |
| Fresh Issue | Up to [●] Equity Shares |
| Aggregating up to ₹ 7,500.00 million | |
| Offer For Sale | Up to [●] Equity Shares |
| Aggregating up to ₹ 22,500 million | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not more than 50% of the Net Issue |
| Retail Shares Offered | Not less than 35% of the Net Issue |
| NII (HNI) Shares Offered | Not less than 15% of the Net Issue |
Manjushree Technopack Limted IPO Issue Price & Size
The issue price of Manjushree Technopack Limted hasn’t been released yet. Upon releasing the dates, the investors can bid between these price ranges. The company has an OFS of up to [●] equity shares consisting of Rs. 2250 crores and fresh issue of Rs. 750 crores.
Launch Date of Manjushree Technopack Limted IPO
The IPO of Manjushree Technopack company is launching on (Opening Date XXXX), hence the opening date for bidding is (Open Date) and the IPO is closing on (Closing Date). Investors can bid in this IPO between these days during the primary market hours.
Manjushree Technopack Limted Financial Statements
| Particulars | FY24 | FY23 | FY22 |
| Income | |||
| Revenue from operations | 21170.03 | 20963.39 | 14670.48 |
| Other income | 132.98 | 122.06 | 67.53 |
| Total income | 21303.01 | 21085.45 | 14738.01 |
| Expenses | |||
| Cost of materials consumed | 12553.44 | 13613.34 | 9152.9 |
| Purchase of stock in trade | 39.28 | 88.89 | 85.13 |
| Change in inventories of finished goods,
work-in-progress and stock-in-trade |
-224.88 | -389.77 | -510.72 |
| Employee benefits expense | 1385.03 | 165.49 | 1071.84 |
| Other manufacturing expenses | 2241.39 | 2214.95 | 1741.45 |
| Finance costs | 914.58 | 7785.38 | 492.13 |
| Depreciation and amortization expenses | 1548.79 | 1328.24 | 862.42 |
| Other expenses | 1442.47 | 1135.41 | 773.56 |
| Total expenses | 19900.1 | 20141.93 | 13667.71 |
| Profit for the year (VII-VIII) | 1407.98 | 592.31 | 708.15 |
| Particulars | Unit of Measurement | FY24 | FY23 | FY22 |
| Total sales by volume | In Metric Tonnes | 163994.93 | 147937.29 | 107917.85 |
| Sales volume by Business Unit | ||||
| Containers | In Metric Tonnes | 53877.07 | 50459.85 | 40641.97 |
| Performs | In Metric Tonnes | 96101.02 | 88903.28 | 65089.5 |
| C&C | In Metric Tonnes | 4440.69 | 2478.91 | - |
| C&C | In Metric Tonnes | 8722.04 | 5068.69 | - |
| P&D | In Metric Tonnes | 213.76 | 173.36 | 144.12 |
| P&D | In Metric Tonnes | 2911.71 | 2392.08 | 1956.7 |
| Recycling | In Metric Tonnes | 2383.06 | 1113.4 | 229.69 |
| Revenue from Operations | ₹ In Millions | 21170.03 | 20963.39 | 14670.48 |
| Gross Profit | ₹ In Millions | 6560.8 | 5435.97 | 4202.71 |
| Gross Profit per KG | Ratio | 40.01 | 36.75 | 38.94 |
| Gross Profit Margin | % | 30.99 | 25.93 | 28.65 |
| EBITDA | ₹ In Millions | 3828.67 | 3011.35 | 2413.17 |
| EBITDA Margin | % | 18.09 | 14.36 | 16.45 |
| Adjusted EBITDA | ₹ In Millions | 4145.68 | 3143.93 | 2448.24 |
| Adjusted EBITDA per KG | Ratio | 25.28 | 21.25 | 22.69 |
| Adjusted EBITDA Margin | % | 19.58 | 15 | 16.69 |
| Profit for the year | ₹ In Millions | 1407.9 | 592.31 | 708.15 |
| Profit for the year Margin | % | 6.65 | 2.83 | 4.83 |
| Adjusted Profit for the year | ₹ In Millions | 2334.65 | 1537.56 | 1077.1 |
| Adjusted Profit for the year margin | % | 11.03 | 7.33 | 7.34 |
| Return on Equity | % | 14.37 | 6.4 | 9.76 |
| Adjusted Return on Equity | % | 19.08 | 12.91 | 10.78 |
| Return on Capital Employed | % | 16.98 | 11.68 | 11.74 |
| Adjusted Return on Capital Employed | % | 27.42 | 21.73 | 18.98 |
| Net Working Capital Days | Days | 65 | 68 | 91 |
| Net Debt / EBITDA | Ratio | 1.3 | 1.56 | 1.43 |
| Net Fixed Asset Turnover | Ratio | 2.55 | 2.67 | 1.99 |
| Net Cash generated from
Operating Activities / EBITDA |
Ratio | 0.92 | 1.07 | 0.7 |
| Free Cash Flow | ₹ In Millions | 2302.63 | 1931.66 | 623.03 |
| Free Cash Flow/ EBITDA | Ratio | 0.6 | 0.64 | 0.26 |
| Basic EPS | Ratio | 2078 | 8.74 | 1045 |
| Adjusted Basic EPS | Ratio | 34.47 | 22.7 | 15.9 |
Manjushree Technopack Limted Promoters & Shareholding
As per the filled document, there is only one promoter of the company, i.e. AI Lenarco Midco Limited. The promoter company holds 65,869,950 Equity Shares and 111,417,707 CCDs of face value ₹100. Promoter’s equity and CCDs represents 97.54 % of the paid-up Equity Share capital of our Company on fully diluted basis.
Should You Subscribe to Manjushree Technopack Limted 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 Manjushree Technopack Limted:
Leadership in the consumer RPP industry
During FY23, they were the largest consumer rigid plastic packer (RPP) player in India, with revenue almost double that of the second largest player. Companies’ focus is on expanding its offerings within packaging and using its manufacturing capabilities to expand into other plastic-using industries. As of FY24, they have 23 manufacturing facilities with an aggregate installed capacity of 268,940.00 metric tons per annum. In Fiscal 2024, their estimated market share in the organized consumer RPP industry in India was 7.6%.
Diversified business model
Manjushree is one of the few Indian consumer RPP players with strong capabilities across most substrates in terms of installed capacity. The company is not dependent on any one product, end-use application, geography, customer, or substrate, and benefits from diversified revenue streams from its wide range of offerings. Manjushree is the only Indian RPP player with presence in all five product categories: containers, preforms, pumps and dispensers, caps and closures, and recycle. The company caters to customers in almost all consumption categories but has strong and growing presence in home care and personal care categories.
Strong customer retention
The company has a history of strong customer retention, driven by customer management practices. For FY24, companies’ retention rate for existing customers has increased to 98.56% from 97.08% in previous financial year. The company's diverse product portfolio and relationship with renounced companies like Pernod Ricard India, Asian Paints, Marico, etc has helped increase cross-selling, co-innovation, new product development, and improved customer service. The company has consistently focused on innovation, cost, and quality improvements has strengthened customer stickiness.
Operational efficiency
Freight cost is an important element in the overall cost structure of the packaging industry, and geographic proximity plays a crucial role in client acquisitions. For bringing in efficiency in cost, reduce delivery time, achieve scalability, they have strategically established 23 manufacturing facilities across major industrial hubs in India. The company invests in upgrading its manufacturing facilities with the latest and most advanced equipment and machinery. They have employed advanced technologies, utilize advanced 3D printing and prototyping, internet of things for predictive and preventive maintenance, and low-cost and customizable machine automation technologies.
Innovation-led growth
The company has been focusing on innovation and has implemented methodologies such as light weighting, transitioning from glass/metal to plastics, and transitioning towards recyclable products. They have co-developed 107 new products, including a sustainable plastic solution for a personal care customer's hair oil product in containers. The company has also adopted innovations in material innovation and has co-developed and commercialized 100% recyclable food-grade PET bottles and 100% PCR-based lubricant containers.
The company has one of the lowest turnaround times in the Indian consumer RPP industry, with an average turnaround time of nine weeks for new product innovations. The company has five registered patents and applied for two patents.
Focus on recycling
Manjushree have been awarded an overall ESG ranking of two out of five by Dun & Bradstreet. During FY24, they sourced near to half of their total power from renewable energy companies and 97.81% of all products sold were made from PET, PP, and PE resins, each of which can be completely recycled. We have also partnered with Ganesha Ecopet Private Limited for enabling them to launch food grade 100% recycled PET packaging solutions in Fiscal 2024.
Consolidation through inorganic acquisitions
The company has successfully acquired and integrated five acquisitions in the last six years, increasing its geographic presence across India. The acquisition not only helps in expanding its product categories but also open paths for new customer base in newer industries. Acquisition leads to diversifying of product portfolio which enables them to cross-sell their products, positively impacting business and profitability.
Capital expenditure
The company has incurred significant capital expenditure to enhance manufacturing capabilities and expand its operational network. This includes additions to tangible assets under property plant and equipment.
| Particulars | FY24 | FY23 | FY22 |
| Additions to tangible assets(1) under property plant and equipment | 1382.16 | 1415.2 | 2994.8 |
Risk Factors of Manjushree Technopack Limted:
Revenue concentration of product
For the past three years, the company has generated significant revenue from container and performs segment. These two products mix contributed to around 70-75% to total revenue. The company faced a slowdown in demand for carbonated soft drinks due to the COVID-19 pandemic, plastic restrictions in Assam and Mount Abu, and customer preferences shifting to alternative packaging materials. However, a decline in demand for these categories could negatively impact the company's revenues, sales, and margins.
| Particulars | FY24 | FY23 | FY22 |
| % of revenue from operations | |||
| Containers | 48.94% | 49.92% | 54.21% |
| Preforms | 35.62% | 38.89% | 38.46% |
| Caps and Closures | 8.05% | 4.81% | 0.00% |
| Pumps and Dispensers | 5.24% | 4.70% | 5.79% |
| Recycle | 0.73% | 0.62% | 0.12% |
| Other revenue from operations | 1.43% | 1.16% | 1.42% |
Dependence on key customers
The company relies heavily on certain key customers for revenue, and future revenues depend on their continued relationships or finding similar customers. In table below, revenue from top five, top ten, and top 20 customers has been mentioned, which contribute significantly to the company's revenue. In the time of economic slowdown, natural calamities, the company may face risks such as reduced orders, failure to renew contracts, and loss of customer’s retention.
| Particulars | FY24 | FY23 | FY22 |
| % of revenue from operations | |||
| Top five customers | 26.94% | 29.10% | 33.06% |
| Top ten customers | 41.64% | 45.18% | 47.72% |
| Top 20 customers | 58.61% | 60.76% | 61.62% |
| Others | 39.70% | 38.08% | 36.97% |
Dependency on supplier
Top 5 suppliers of raw materials, packaging materials, and tools and equipment to the company contributes to significant percentage of expenses. The company has a network of 664 suppliers, with the top supplier contributing to 33 % of total supplies, whereas top 5 contributes to about 45% of total supplies. Any disruption in supplies or increase in prices that lead to adverse impacts on business profitability and operations.
Proportion of revenues from manufacturing facilities
The company generates a significant portion of its revenues from manufacturing facilities in the southern region of India. As can be seen from data mentioned in table below the company generates almost half of revenue from South, about 70% of revenue from South and North combine. Any social, political, economic, natural calamities in the southern region could disrupt operations or cause a complete shutdown, potentially affecting the company's ability to provide quality products.
| Particulars | FY24 | FY23 | FY22 |
| North | 30.10% | 31.05% | 33.03% |
| East | 8.02% | 7.09% | 6.45% |
| South | 46.90% | 50.60% | 54.64% |
| West | 13.55% | 10.08% | 4.44% |
| Other revenue from operations | 1.43% | 1.16% | 1.42% |
Stringent quality requirements
These days, item from medicines to take away food is being packed in plastic items, so the company is subject to strict quality requirements from regulatory authorities. If products do not stand on regulatory specifications, the company may attract liability claims, legal proceedings, and cancellation of product orders. Result of which could have material effect on the business, financials and cash flows.
Capacity utilization
The company makes significant decisions based on customer orders, including production schedules, personnel requirements, and resource requirements. Changes in demand for end-use products can reduce the ability to estimate future customer requirements, making it difficult to schedule production and leading to over or under utilization of manufacturing capacity. The company's installed capacity and capacity utilization for various products in past few years. Any mismatch between capacity and utilization could adversely affect the business, financial condition, cash flows, and operational results.
| Products | FY24 | FY23 | FY22 |
| Capacity Utilization | |||
| Containers | 63.39% | 67.34 | 57.61% |
| Preforms | 89.98% | 92.91% | 80.04% |
| Caps and Closure | 74.47% | 48.98% | - |
| Pumps and dispensers | 72.34% | 61.41% | 50.82% |
| Recycle | 39.72% | 18.56% | 3.83% |
Manjushree Technopack Limted Grey Market premium
Grey market premium is the premium quoted over the IPO issue price. GMP shows that investors are ready to pay above the upper band of the IPO issue price. GMP is determined in the grey market as per the demand and supply of the shares in the primary market. A grey market is that unofficial ecosystem of unlisted companies' stocks that start trading even before the launch of the IPO to the date of its listing.
Also Read: What is Grey Market Premium in IPO: How is GMP Calculated & Reliable
However, GMP is not a reliable factor, as it keeps fluctuating as per the demand and supply of shares in the primary market. There are numerous factors that affect the stock market in India and individual stock prices of different companies that are already listed and trading in the secondary market. However, for an IPO-bounded company, you can consider the GMP as the speculative listing price of the share
According to various online sources, the Grey Market Premium or GMP of the Manjushree Technopack is trading around Rs XX in the grey market. It means shares are trading at the upper band issue price of Rs XX with a premium in the grey market and may list around the same price.
