Abril Paper BSE SME IPO review (Not Rated)

•    The company is engaged in the manufacturing and marketing of sublimation paper rolls and related products.
•    After stagnant top lines for FY23 and FY24, it marked boosted top line for FY25.
•    Quantum jump in bottom line for FY25 raise eyebrows and concern over its sustainability going forward.
•    Based on recent financial data, the issue appears exorbitantly priced. 
•    There is no harm in skipping this pricey offer being “High Risk/Low Return” bet.

ABOUT COMPANY:
Abril Paper Tech Ltd. (APTL) is engaged in the manufacturing and marketing of sublimation paper rolls and related products. As a manufacturer, it specializes in producing sublimation heat transfer paper in various GSM (grams per square meter) specifications, including 30, 65, 75, and 90 GSM. Each GSM specification is designed to meet different needs within the sublimation printing process, offering a range of applications from light and delicate transfers to more robust and detailed printing tasks. The company has own dedicated sales team to market products and maintain strong customer relationships.

Since inception, the promoters have focused on developing products with heat transfer paper suitable for printing on various types of textile materials as per customer requirements. With the growth in business, the company aims to cater to the national market. It operates two coating lines, enabling it to Process and supply large quantities of coated sublimation paper. APTL uses quality grade half-white shade virgin paper and specialized coating chemicals, prioritizing consistent coating quality and the preserving of the base paper. It is sourcing base paper directly from Paper manufacturer and dealers of manufacturer. Its well-equipped manufacturing facility is located at 238/3, Shiva Ind. Estate, Jolva, Ta. Palsana, District-Surat, Gujarat, India – 394305, where the company operates a Sublimation with Heat Transfer Paper Coating Machine capable of speeds between 120-160 meters / minute. 

With the ability to coat paper in rolls, it offers customized roll lengths to meet specific customer requirements, supporting continued business expansion. Its products find application in various industries including the printing, garments, textile, hosiery and household curtain and furniture. Its mission is to provide sublimation heat transfer paper that supports clients' creativity and business success. It is committed to delivering of the coated sublimation paper daily to satisfied clients. As of July 31, 2025, it had 18 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden IPO of 2200000 equity shares of Rs. 10 each at a fixed price of Rs. 61 per share to mobilize Rs. 13.42 cr. The IPO opens for subscription on August 29, 2025, and will close on September 02, 2025. The minimum application to be made is for 4000 shares and in multiple of 2000 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 27.56% of post-IPO paid-up equity capital of the company. The company is spending Rs. 1.01 cr. for the fresh equity issue process, and from the net proceeds of the issue, the company will utilize Rs. 5.40 cr. for capital expenditure on plant and machinery, Rs. 5.00 cr. for working capital, and Rs. 2.01 for general corporate purposes.

The IPO is solely lead managed by Interactive Financial Services Ltd., while KFin Technologies Ltd. is the registrar to the issue. B. N. Rathi Securities Ltd. is the market maker. 

The company has issued initial equity shares at par, and issued further equity shares at a fixed price of Rs. 61 per share in April 2024, and June 2024. The average cost of acquisition of shares by the promoters is Rs. 10.00 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 5.78 cr. will stand enhanced to Rs. 7.98 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 48.69 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted total Income/Net Profit of Rs. 25.26 cr. / Rs. 0.39 cr. (FY23), Rs. 25.13 cr. / Rs. 0.96 cr. (FY24), and Rs. 60.92 cr. / Rs. 1.41 cr. (FY25). Two broken periods of FY24 from 01.04.23 to 31.12.23, and 17.11.23 to 31.03.24 needs clarification for the common periods involved in these data. (Here merging of both is simply done for annualized numbers).

For the last two fiscals, the company has reported an average EPS of Rs. 2.27, and an average RoNW of 14.62%. The issue is priced at a P/BV of 3.35 based on its NAV of Rs. 18.19 as of March 31, 2025, and at a P/BV of 2.03 based on its post-IPO NAV of Rs. 29.99 per share. 

If we attribute its FY25 super earnings on post-IPO expanded equity base, then the asking price is at a P/E of 34.46, and based on its FY24 earnings, the P/E stands at 50.83. Thus, based on its recent financial data, the issue appears exorbitantly priced.

The company has posted PAT margins of 1.54% (FY23), 2.91%+6.27% (FY24 – two broken periods), 2.32% (FY25), and RoCE Margins of 15.54%, 20.23%+7.78%, 16.38%, respectively for the referred periods. 

DIVIDEND POLICY:
The company has not declared any dividends since its incorporation. It will adopt a prudent dividend policy, based on its financial performances and future prospects.

COMPARISON WITH LISTED PEERS:
As per offer document, the company has no listed peers to compare with. 

MERCHANT BANKER’S TRACK RECORDS:
This is the 26th mandate from Interactive Financial in the last five fiscals (including the ongoing one). Out of last 13 listings (including 1 mainboard), 4 opened at discount, and the rest with premium ranging from 2.50% to 90.00 % on the date of listing.