Shree Tirupati Balajee IPO Basis of Allotment

Our Company was originally incorporated as 'Shree Tirupati Balajee Agro Trading Company Private Limited'. as a private limited company under the provisions of Companies Act. 1956. pursuant to certificate of incorporation dated October 23.20i101 issued by the Registrar of Companies. Madhya Pradesh and Chattisgarh. Upon the conversion of our Company into a public limited company, pursuant to the approval accorded by our Shareholders at their Extra-Ordinary General Meeting held on November 20,2023, the name of our (Company was changed to "Shree Tirupati Balajee Agro Trading Company Limited" and a fresh certificate of incorporation consequent upon change of name upon conversion to public limited company was issued to our Company by the RoC on November 21,2023. For details relating to the changes in registered office of our Company, see the section titled 'History and Certain Corporate Matters" on page 223

 

Our Company has filed the Prospectus dated September 10.2024 with the RoC. and the Equity Shares are proposed to be listed on the National Stock Exchange of India Limited ("NSE") and BSE Limited ("BSE") and trading id expected to commence on September 12, 2024.

INITIAL PUBLIC OFFER OF UP TO 2,04,40,000 EQUITY SHARES OF FACE VALUE OF ^ 10 EACH ("EQUITY SHARES") OF SHREE TIRUPATIBALAJEE A(GRO TRADING COMPANY LIMITED ("COMPANY OR "ISSUER") FOR CASH AT A PRICE OF Rs. 83 PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF ^73 PER EQUITY SHARE) ("OFFER PRICE") AGGREGATING UP TO Rs. 16,965.20 LAKHS (COMPRISING AFRESH ISSUE OF UP T01,47,50,000 EQUITY SHARES AGGREGATING UP TO Rs. 12,242.50 LAKHS BY OUR COMPANY ("FRESH ISSUE") AND AN OFFER FOR SALE OF UP TO 56,90,000 EQUITY SHARES AGGREGATING UP'TO Rs. 4,722.70 LAKHS ("OFFER FOR SALE"), COMPRISING OF UP TO 56,90,000 EQUITY SHARES AGGREGATING UP TO ^ LAKHS BY BINOD KUMAR AGARWAL (THE PROMOTER SELLING SHAREHOLDER") AND SUCH EQUITY SHARESS OFFERED BYTHE PROMOTER SELLING SHAREHOLDER (THE "OFFERED SHARES"). (SUCH OFFER BY THE PROMOTER SELLING SHAREHOLDER, THE "OFFER FOR SALE" AND TOGETHER WITH THE FRESH ISSUE, THE "OFFER").THE OFFER SHALL CONSTITUTE UP TO 25.06% OF THE POST-OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY.

 

1. Our Company's name may suggest involvement in the agricultural sector, which could lead to misunderstandings among investors. However, our core business is the manufacturing and selling of Flexible Intermediate Bulk Containers (FIBCs) and other industrial packaging products, not agricultural activities. While we do supply packaging solutions for the agro industry, our focus extends to a wide range of sectors.

2. We operate out of 5 (five) manufacturing facilities which are situated at Pithampur, Madhya Pradesh and any localized social unrest, natural disaster, delay in production at, or shutdown of, or any interruption or unforeseeable events such as natural disasters or pandemics in or around these particular geographical areas could significantly impact our business and financial condition.

3. We have experienced negative cash from operating activities in fiscals 2024 and 2022 of Rs. 2649.84 lakhs and Rs. 2215.72 lakhs respectively. Any negative cash flow in the future would adversely affect our result of operations and financial condition.

4. We have outstanding borrowings amounting to Rs. 24,533.37 lakhs as on May 31,2024. We may incur additional debt for various reasons, including expansion, working capital needs, and refinancing existing loans. Failure to manage or service this debt could lead to penalties or acceleration of repayments, adversely affecting our business and financial performance.

5. Our Company's working capital requirements March 31, 2024, March 31, 2023 and March 31, 2022 was Rs. 35,233.40 lakhs, Rs. 26,760.99 lakhs, Rs. 25,679.69 lakhs respectively. If we are unable to raise sufficient working capital, the operations of our Company will be adversely affected.

6. We will not receive any proceeds from the Offer for Sale portion and the same will be received by the Selling Shareholder

7. Polymers are the primary raw materials for our company, constituting a significant portion of our total expenses and the major component of our cost structure. These materials, derived from crude oil, are subject to price fluctuations in the crude oil market and foreign exchange risks during imports.

in lakhs, except for percentages)

Supply shortages, price changes, and cost overruns in these raw materials can significantly impact our operations.

8. We are dependent on our Raw material suppliers. Our top 1 raw material supplier contributed 42.39%, 51.29% and 68.45% in fiscals 2024, 2023 and 2022 respectively. Any inability to on our part to procure sufficient quantities of raw materials could lead to lower sales volumes and profit margins.

9. Our Company relies heavily on plastic as a primary raw material for products such as FIBCs, woven sacks, and fabrics, all made from polypropylene. For Fiscal 2024 and 2023, FIBC contributed 51.47% and 67.89% of our Company's revenue respectively. In the event if plastic-based packaging products are banned in India or export markets, it could significantly affect our business operations and revenue.

10. In Fiscals 2024,2023 and 2022, the revenues generated from sales in western zone represented 93.81 %, 90.06% and 73.61%, respectively of our revenue from operations and any adverse developments in this market could adversely affect our business

11. Major portion of our revenue is dependent on exports, particularly to the USA, Germany, Sweden, and other key international markets. In fiscals 2024,2023, and 2022, export revenue comprised 49.04%, 64.13%, and 84.44% of our net revenue from operations, respectively. This geographic concentration exposes us to regional economic risks, including inflation and economic downturns, which could adversely impact our financial performance. Despite efforts to diversify, failure to expand into new markets may affect our business stability and growth prospects.

12. The Price to Earnings ratio at the Floor Price is 13.59 times and the Cap Price is 14.46 times based on diluted EPS as per Restated Consolidated Financial Statements forthe Fiscal 2024.

13. Average cost of acquisition of our Promoter Selling Shareholder as on the date of RHP:

*As certified by M.S. Dahiya & Co, Chartered Accountants, by way of their certificate dated August 30,2024

14. Weighted Average Return on Net Worth of our Company for Fiscals 2024,2023 and 2022 is 19.16%.

15. The weighted average cost of acquisition of all Equity Shares acquired in last three years, 18 months and one year preceding the date of the RHP by are as follows:

*As certified by M.S. Dahiya & Co, Chartered Accountants, by way of their certificate dated August 30,2024.

16. Weighted average cost of acquisition, floor price and cap price:

*As certified by M.S. Dahiya & Co, Chartered Accountants, by way of their certificate dated August 30,2024.

17. The 2 BRLMs associated with the Offer has handled 9 Main board public issues and 10 SME public issues in the past three Financial years, out of which Nil issue has closed below the issue price on listing date

 

The Offer was made through Book Building Process, in terms of Rule 19<2)(b) of the Securities Contacts (Regulation) Rules, 1957 (SCRR), read with Regulation 31 of the SEBIICDR Regulations. The Offer was made in accordance with Regulation 6(1) of the SEBI ICDR Regulations, through the Book Building Process wherein not more than 50% of the Offer was available for allocation on a proportionate basis to Qualified Institutional Buyers (QIBs) (such portion referred to as QIB Portion), provided that our Company and the Selling Shareholders, in consultation with the BRIM allocated up to 60% of the QIB Portion to Anchor Investors on a discretionary basis in accordance with the SEBI ICDR Regulations (Anchor Investor Portion), out of which one-third was reserved for domestic Mutual Funds only, subject to valid Bids being received from domestic Mutual Funds at or above the price at which allocation was made to Anchor Investors (Anchor Investor Allocation Price), in accordance with the SEBI ICDR Regulations. In the event of under-subscription or nonallocation in the Anchor Investor Portion, the balance Equity Shares shall be added to the Net QIB Portion. Further, 5% of the Net QIB Portion was available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the NetQIBPortion was available for allocation on a proportionate basis to all QIB Bidders(other than Anchor Investors), including Mutual Funds, subject to valid Bids being received at or above the Offer Price. However, if the aggregate demand from Mutual Funds is less than 5% of the Net QIB Portion. the balance Equity Shares available for allocation in the Mutual Fund Portion was added to the remaining Net QIB Portion for proportionate allocation to all QIBs. Further, not less than 15% of the Offer was available for allocation on a proportionate basis to Non-lnstitutional Investors out of which (a) one-third of such portion was reserved for applicants with application size of more than 10.2 million and up to Rs. 1.00 million; and (b) two-third of such portion was reserved for applicants with application see of more than ' 1.00 million, provided that the unsubscribed portion in either of such sub-categories was allocated to applicants in the other sub-category of Non-lnstitutional Investors and not less than 35% of the Offer was available for allocation to Retail Individual Investors in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. All potential Bidders (except Anchor Investors) were required to mandatorily use the Application Supported by Blocked Amount (ASBA) process providing details of their respective ASBA accounts, and UPI ID in case of UPI Bidders, if applicable, in which the corresponding Bid Amounts was blocked by the SCSBs or by the Sponsor Bank(s) under the UPI Mechanism, as applicable, to the extent of the respective Bid Amounts. Anchor Investors were not permitted to participate in the Offer through the ASBA process. For further details, see Offer Procedure' on page 406 of the Prospectus.

The bidding for Anchor Investor opened and closed on September 04.2024. The Company received 6 applications from 6 Anchor Investors for 73,51.020 Equity Shares. The Anchor Investor Offer Price was finalized at Rs. 83 per Equity Share. Atotal of61.32.000 Equity Shares were allocated under the Anchor Investor Portion aggregating to Rs. 50,89,56,000.00.

The Offer received 2.497,348 applications for 1,791,810.720 Equity Shares resulting in 125.23 times subscription as disdosed in the Prospectus. The details of the applications received in the Offer from Retail Individual Bidders. Non-lnstitutional Bidders. Eligible Employees and QIBs are as under (before rejections):

Final Demand

A summary of the final demand as per NSE and BSE as on the Bid/Offer Closing Date at different Bid prices is as under;

The Basis of Allotment was finalized in consultation with the Designated Stock Exchange, being NSE on September 10.2024.

A. Allotment to Retail Individual Bidders (After Rejections) (including ASBA Applications)

The Basis of Allotment to the Retail Individual Bidders, who have bid at cut-off or at the Offer Price of Rs. 83 per Eqmty. was finahzed in consultation with NSE. This category has been subscribed to the extent of 71.62 times. The total number of Equity SharesAllotted in Retail Individual Bidders category is 7.154,000 Equity Shares to 39.774 successful applicants. The category-wise details of the Basis of Allotment are as under

B. Allotment to Non-lnstitutional Bidders (more than Rs. 0.20 million and upto Rs.1 million) (After Rejections) (including ASBA Applications)

The Basis of Allotment to the Non-lnstitutional Bidders (more than 0.20 million and upto Rs.1 mSion). who have bid at cut-off or at the Offer Price of Rs.83 per Equity, was finalized m consultation with NSE. This category has been subscribed to the extent of 177.99 times. The total number of Equity Shares allotted in this category is 1.022.000 Equity Shares to 405 successful applicants. The category-wise details of the Basis of Allotment are as under (Sample):

C. Allotment to Non-lnstitutional Bidders (more than Rs. 1 million) (After Rejections) (including ASBA Applications)

The Basis of Allotment to the Non-lnstitutional Bidders (more than Rs.1 million), who have bid at cut-off or at the Offer Pnce of Rs.83 per Equity, was finalized in consultation with NSE. This category- has been subscribed to the extent of 224.53 times. The total number of Equity Shares allotted in this category is 2.044,000 Equity Shares to 811 successful applicants The category-wise details of the Basis of Allotment are as under (Sample)

D. Allotment to QIBs (After Rejections)

Allotment to QIBs. who have bid at cut-off or at the Offer Price of Rs.83 per Equity, has been done on a proportionate basis in consultation with NSE. This category has been subscribed to the extent of 149.91 times of Net QIB portion. The total number of Equity Shares allotted in the QIB category is 4.088.000 Equity Shares, which were allotted to 76 successful Applicants.

E. Allotment to Anchor Investors (After Rejections)

The Company, in consultation with the BRLMs, have allocated 6.132.000 Equity Shares to 6 Anchor Investors (through 6 Anchor Investor Application Forms) at an Anchor Offer Price at 7 83 per Equity Share in accordance with SEBIICDR Regulations. This represents 60% of the QIB portion.

The Board of Directors of our Company at its meeting held on September 10.2024 has taken on record the basis of allotment of Equity Shares approved by the Designated Stock Exchange, being NSE and has allotted the Equity Shares to various successful applicants. The Allotment Advice Cum Refund Intimation and/or notices have been dispatched to the address of the investors as registered with the depositories. Further, instructions to the SCSBs have been issued for unblocking of funds and transfer to the Public Offer Account on September 10,2024 and the payments to non-syndicate brokers have been issued on September 11.2024. In case the same is not received within ten days, investors may contact the Registrar to the Offer at the address given below. The Equity Shares allotted to the successful allottees have been uploaded on September 11.2024 for credit into the respective beneficiary accounts subject to validation of the account details with the depositories concerned. The Company has filed the Listing application with BSE and NSE on September 11,2024. The Company has received the listing and trading approval from BSE & NSE, and trading will commence on September 12.2024.

Note: All capitalized terms used and not defined herein shall have the respective meanings assigned to them m the Prospectus.

These details of the Allotment made was hosted on the website of Registrar to the Offer, Link Intime India Private Limited at www.linkintime.co.in.

All future correspondence in this regard may kindly be addressed to the Registrar to the Offer quoting full name of the First/ Sole applicant, Serial number of the Bid cum Application form number, Bidders DP ID. Client ID, PAN. date of submission of Bid cum Application Form, address of the Bidder, number of Equity Shares bid for, name of the Member of the Syndicate, place where the bid was submitted and payment details at the address given below:

 

SHREE TIRUPATIBALAJEE AGRO TRADING COMPANY LIMITED is proposing, subject to applicable statutory and regulatory requirements, receipt of requisite approvals, market conditions and other considerations, to undertake an initial public offenng of its Equity Shares and has filed the RHP with ROC. Gwalior. Madhya Pradesh. The RHP shall be available on the website of the SEBI at www.sebi.gov.in, the website of the BRLMs to the Offer at www.pnbisl.com. www.unistonecapital.com and websites of BSE and NSE i.e. www.bseindia.com and www.nsemdia.com, respectively. Investors should note that investment in equity shares involves a high degree of risk and for details relating to the same, see section titled 'Risk Factors' beginning on page 35 of the RHP. Potential bidders may reply on the information disclosed in the RHP as being true and correct. The Equity Shares offered in the Offer have not been and will not be registered under the U.S. Securities Act of 1933. as amended (the' Securities Act") or any state securities laws in the United States, and unless so registered, may not be offered or sold within the United Slates except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Secunties Act and any applicable U.S state securities laws. There will be no public offenng in the United States and the securities being offered in this announcement are not being offered or sold in the United States.