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2025-07-29 04:00:13 pm | Source: Accord Fintech
BD Industries (Pune) coming with IPO to raise Rs 45.36 crore
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BD Industries (Pune) coming with IPO to raise Rs 45.36 crore

BD Industries (Pune)

* BD Industries (Pune) is coming out with an initial public offering (IPO) of 42,00,000 equity shares in a price band Rs 102-108 per equity share.

* The issue will open on July 30, 2025 and will close on August 1, 2025.

* The shares will be listed on SME Platform of BSE.

* The face value of the share is Rs 10 and is priced 10.2 times of its face value on the lower side and 10.8 times on the higher side.

* Book running lead manager to the issue is Aryaman Financial Services.

* Compliance Officer for the issue is Prerana Bhargav Gor.

 

Profile of the company

The company started journey in 1984 with repairs and manufacturing of traction batteries. Thereafter it started making plastic container boxes for the same traction batteries using roto-moulding technology. Acquired Toyo containers (Partnership firm) in year 2010. After that it began with the production of high-quality rotomolded battery boxes and water tanks. Over time, it has expanded its capabilities to manufacture a wide range of plastic components for automotive and industrial applications, establishing itself as a leading player in the industry.

Currently, the company is engaged in the business of manufacturing and trading of Plastic Products for varied industries. In the automotive sector, its key products include Plastic fuel tanks for off-road vehicles, urea tanks, fenders, hydraulic tanks, air ducts, mudguards, and cabin roofs. Beyond automotive, its rotomolded plastic products serve diverse industries, including road & highway safety, material handling & storage, water management & disposal, marine, renewable energy, healthcare, and custom moulding.

With a commitment to innovation and quality, it continues to deliver durable, high-performance solutions that meet the evolving needs of its customers across various sectors. The company along with its subsidiaries operates three manufacturing facilities strategically located across India to support its diverse production/customer needs. Each facility is fully equipped with advanced machinery and handling equipment to ensure a smooth and efficient manufacturing process. Its plants are strategically designed for optimal logistics, enabling streamlined operations and timely deliveries.

Proceed is being used for:

* Repayment or pre-payment of borrowings.

* Funding working capital requirements.

* Investment in B.D. Industries (India), its material subsidiary.

* General corporate purpose.

 

Industry Overview

The Indian plastic industry is one of the leading sectors in the country’s economy. The history of the plastic industry in India dates back to 1957 with the production of polystyrene. Since then, the industry has made substantial progress and has grown rapidly. The industry is present across the country and has more than 2,500 exporters. It employs more than 4 million people in the country and constitutes 30,000 processing units; among these, 85-90% belong to small and medium enterprises. India manufactures various products such as plastics and linoleum, houseware products, cordage, fishnets, floor coverings, medical items, packaging items, plastic films, pipes, raw materials, etc.

In FY25 (Until June 2024), India’s plastic exports stood at $2.93 billion. During this period, the exports of plastic films & sheets, FIBC woven sacks woven fabrics & tarpaulin and Packaging items - flexible rigid grew by 24.9%, 11.9%, and 10.4%, respectively, over the same period last year. The cumulative exports of plastics and related materials during 2022-23 were valued at $11.96 billion. This was a 10.4% decrease from the 2021-22 exports valued at $13.35 billion. Plastic raw materials were the largest exported category and constituted 27.76% of the total exports in 2022-23; it recorded a growth of 21.5% over the previous year. Plastic films and sheets were the second largest category, comprising 15.13% of the total exports, but declined by 10.6% over the previous year.

The Plastic Export Promotion Council (PLEXCONCIL) has set a target to increase the plastic exports of the country to $25 billion by 2027. There are multiple plastic parks that are being set up in the country in a phased manner that will help improve the plastic manufacturing outputs of the country. Under the plastic park schemes, the Government of India provides funds of up to 50% of the project costs or a ceiling cost of Rs 40 crore ($5 million) per project. Government initiatives like ‘Digital India’, ‘Make in India’, and ‘Skill India’ will also boost India’s Plastic industry. For instance, under the ‘Digital India’ program, the government aims to reduce the import dependence on products from other countries, which will lift the local plastic part manufacturers.

Pros and strengths

Quality assurance: The company is committed towards quality of its products. Maintaining a high standard of quality for its products is critical to its brand and continued growth. It has been laying paramount importance towards quality improvisation of its products. It adheres to stringent quality parameters and has introduced Quality Management System based on International Standard ISO 9001:2015. The company boasts a highly skilled Engineering team, collectively bringing years of experience in the industry.

Long standing relations: The company has successfully built and maintained strong relationships with its major customers, which has been instrumental in establishing a solid client base. These enduring relationships have not only fostered repeat business but have also helped it develops a long-term customer retention strategy. It views its existing client relationships as a key competitive advantage, enabling it to attract new clients and drive business growth.

Scalable business model: Its business model is order-driven and focuses on the optimal utilization of its manufacturing, processing, and trading facilities. It emphasizes maximizing capacity utilization, building strong partnerships with quality raw material suppliers, and achieving economies of scale. This approach has proven both successful and scalable over the past financial years, allowing it to expand in response to growing demand. The scalability of its model is driven by the potential to tap into new markets, adopt aggressive marketing strategies, innovate within its product range, and consistently maintain high product quality.

Risks and concerns

Significantly dependent on few customers: Its business from customers is dependent on its continuing relationship with such customers, the quality of its products and its ability to deliver on their orders, and there can be no assurance that such customers will continue to do business with the company in the future on commercially acceptable terms or at all. However, in case of any change in the buying pattern of its end users or disassociation of major customers can adversely affect its business or if its customers do not continue to purchase products from the company, or reduce the volume of products purchased from the company, its business prospects, results of operations and financial condition may be adversely affected.

Does not have long term agreement with suppliers: For the year ended Fiscal 2025, Fiscal 2024 and Fiscal 2023, its cost of material consumed amounted to 51.15%, 60.75% and 68.39% of its total revenue respectively. It has not entered into long term contracts with its suppliers and prices for raw materials are normally based on the quotes it receives from various suppliers. Any discontinuation of production by these suppliers or a failure of these suppliers to adhere to the delivery schedule or the required quality and quantity could hamper its manufacturing schedule. There can be no assurance that strong demand, capacity limitations or other problems experienced by its suppliers will not result in occasional shortages or delays in their supply of raw materials to the company. Its inability to obtain raw material in a timely manner, in sufficient quantities could adversely affect its operations, financial condition and/or profitability.

High working capital requirements: Its business requires significant working capital, such as to finance the purchase of raw materials, consumables, stores & spares and payments for operating expenses before it receives payment from its customers. In addition, the actual amount of its future capital requirements may differ from estimates as a result of, among other factors, cost overruns, unanticipated expenses, regulatory changes, economic conditions, additional market developments. In the event, it is unable to source the required amount of working capital for addressing such increased demand of its products, it might not be able to efficiently satisfy the demand of its customers. Even if it is able to source the required amount of funds, it cannot assure that such funds would be sufficient to meet its cost estimates and that any increase in the expenses will not affect the price of its products.

Outlook

BD Industries (Pune) is engaged in the business of manufacturing and trading of Fuel Tank, Road Safety Products, Plastic Pallets, Water Tanks, Moulds and Dies, Other Plastic Products and Related Material located in India. On the concern side, majority of revenue contribution comes from the Maharashtra, Madhya Pradesh, Punjab, Haryana, Telangana, Karnataka and Tamilnadu which contributed 85.19%, 79.67% and 87.05% of its revenue from Operations in for Fiscal 2025, 2024 and 2023, respectively. Further, it has not entered into any agreement with its customers for long term sales. Any change in governmental policies or occurrence of natural disasters in any of these states may impact its business, results of operations and cash flows.

The company is coming out with a maiden IPO of 42,00,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 102-108 per equity share. The aggregate size of the offer is around Rs 42.84 crore to Rs 45.36 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operation has increased by 51.85% to Rs 8,237.85 lakh in Fiscal 2025 from Rs 5,425.02 lakh in Fiscal 2024. Moreover, its profit for the year increased by 139.16% to Rs 760.54 lakh in Fiscal 2025 from Rs 318.00 lakh in Fiscal 2024.

As part of its growth strategy, the company is constructing new manufacturing facility at Zaheerabad. This expansion will enable the company to strengthen its presence, enhance production capacity, and improve supply chain efficiency. By expanding its geographical reach, the company aims to cater to a broader customer base, reduce logistics costs, and capitalize on emerging business opportunities. This move aligns with the company’s vision of sustainable growth and market leadership in the industry.

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