Vigor Plast NSE SME IPO review

•    The company that was primarily incorporated as a trader in PVC pipes and fittings, ventured in to its manufacturing.
•    It has comprehensive range of products for variety of uses.
•    It marked progress in its top and bottom lines for the reported periods.
•    The sudden boost in its bottom lines from FY24 onwards raise eyebrows and concern over its sustainability as it operates in a highly competitive and fragmented segment.
•    Based on its recent financial data, the issue appears aggressively priced. 
•    Well-informed/cash surplus investors may park moderate funds for medium term.

ABOUT COMPANY:
Vigor Plast India Ltd. (VPIL) was incorporated in 2014, initially focusing on the trading of PVC pipes and fittings. In the year 2020 onwards, it expanded operations by establishing a manufacturing facility to produce Polyvinyl Chloride (PVC), Unplasticized Polyvinyl Chloride (uPVC), and Chlorinated Polyvinyl Chloride (cPVC) pipes, fittings, and related products. The company is a manufacturer and supplier of a comprehensive range of Polyvinyl Chloride (PVC), Unplasticized Polyvinyl Chloride (uPVC) and Chlorinated Polyvinyl Chloride (cPVC) pipes, fittings, and related products for various applications in plumbing, irrigation, and SWR (Soil, Waste, and Rainwater) management. 

It caters to both rural and urban markets and provides long lasting solutions for water distribution, wastewater management, and drainage. Its products, known for their durability and resistance to corrosion, are used in residential, commercial, agricultural and industrial sectors. VPIL’s focus is on delivering high-quality, efficient systems that meet the diverse requirements of customers. It has received several quality certifications from the Bureau of Indian Standards (BIS) for both products and manufacturing facility. 

It has established four warehouses across four strategic locations in Gujarat: Rajkot, Jamnagar, Surat and Ahmedabad in Gujarat, India. These warehouses enable it to maintain efficient stock levels and ensure prompt order fulfilment. From these locations, the company manages the distribution of products to various regions within India, ensuring that customers receive their orders in a timely manner. As of June 30, 2025, it had 81 employees on its payroll. The company markets its product under “Vigor” brand name.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its book building route maiden combo IPO of 3099200 equity shares to mobilize Rs. 25.10 cr. (at the upper cap). The company has announced a price band of Rs. 77 – Rs. 81 per share of Rs. 10 each. The issue consists of 2499200 fresh equity shares issue (worth Rs. 20.24 cr. at the upper cap), and an Offer for Sale (OFS) of 600000 equity shares (worth Rs. 4.86 cr. at the upper cap). The IPO opens for subscription on September 04, 2025, and will close on September 09, 2025. The minimum application to be made is for 3200 shares and in multiple of 1600 shares thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. The issue constitutes 29.94% of post-IPO paid-up equity capital of the company. From the net proceeds of the issue, the company will utilize Rs. 3.80 cr. for capital expenditure on construction of new warehouse, Rs. 11.39 cr.  for repayment/prepayment of certain borrowings, and the rest for general corporate purposes.

The IPO is solely lead managed by Unistone Capital Private Ltd., while KFin Technologies Ltd., is the registrar to the issue. Alacrity Securities Ltd., is the market maker as well as a syndicate member. 

The company has issued initial equity shares at par, and issued further equity shares at a fixed price of Rs. 1400.00 per share in October 2024. It has also issued bonus shares in the ratio of 14 for 1 in October 2024. The average cost of acquisition of shares by the promoters/selling stakeholders is Rs. 2.26, Rs. 2.87, Rs. 4.48, Rs. 15.37, and Rs. 18.77per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 7.85 cr. will stand enhanced to Rs. 10.35 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 83.85 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted total Income/Net Profit of Rs. 37.39 cr. / Rs. 0.30 cr. (FY23), Rs. 42.52 cr. / Rs. 2.93 cr. (FY24), and Rs. 46.02 cr. / Rs. 5.15 cr. (FY25). Surge in bottom lines from FY24 onwards raise eyebrows and concern over its sustainability as it is operating in a highly competitive and fragmented segment.  Its debt-equity ratio of 1.39 as of March 31, 2025 raise alarm. It has negligible earnings from exports.

For the last three fiscals, the company has reported an average EPS of Rs. 4.60, and an average RoNW of 64.51%. The issue is priced at a P/BV of 4.98 based on its NAV of Rs. 16.27 as of March 31, 2025, and at a P/BV of 2.54 based on its post-IPO NAV 31.90 per share (at the upper cap). 

If we attribute its FY25 super earnings on post-IPO expanded equity base, then the asking price is at a P/E of 16.27, and based on its FY24 earnings, the P/E stands at 28.62. Thus, based on its recent financial data, the issue appears aggressively priced.

The company has posted PAT margins of 0.80% (FY23), 6.90% (FY24), 11.30% (FY25), and RoCE Margins of 9.49%, 19.58%, 28.24%, respectively for the referred periods. The company posted extra-ordinary margins for the reported periods compared to its peers.

DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. 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 shown Captain Pipes, Dutron Poly, Rex Pipes, as their listed peers. They are currently trading at a P/E of around 25.2, 34.6, and 29.2 (as of September 03, 2025). However, they are not truly comparable on an apple-to-apple basis. This compare appears to be an eyewash.

MERCHANT BANKER’S TRACK RECORDS:
This is the 27th mandate from Unistone Capital in the last three fiscals (including the ongoing one). Out of last 10 listings, 5 opened at discount, and the rest with premium ranging from 3.84% to 105.00% on the date of listing.