BLS Polymers
IPO Size: Rs. 255 cr, entirely Fresh Issue
- For capex Rs. 78 cr, over FY27E and FY28E
- Towards working capital Rs. 90 cr
Price band: Rs. 142-150 per share
M cap: Rs. 930 cr, implying 27% dilution
IPO Date: Tue 27th Oct to Thu 29th Oct 2026, Listing Tue 3rd Nov 2026
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
B2B Polymer Compound Maker
BLS Polymers is a 36-year-old New Delhi headquartered company manufacturing different types of polymer compounds such as high-density polyethylene compound (HDPE), medium-density polyethylene compounds (MDPE), linear low-density polyethylene compounds (LLDPE), cross-linked polyethylene compounds (XLPE) used for insulation in the wire and cable industry besides adding strength and insulation to the end use product. Company’s annual revenue of Rs. 350 cr is split 80:20 between wires and cables industry and industrial pipelines.
Unjustified Capex
Company has a single plant in Goa with installed manufacturing capacity of 30,294 MTPA (24,511 MTPA for polyethylene and 5,783 MTPA of XLPE), which is only 75% utilized. Since FY24, company’s production volume of polyethylene and XLPE is flat i.e. no volume growth for past 3 fiscals.
Whatever little revenue growth has occurred in the past few years has been solely due other products, excluding polyethylene and XLPE, which are not key to company’s operations. In this backdrop a large capex of Rs. 78 cr, to double polyethylene capacity and to quadruple XLPE capacity, looks premature.
Margins Expand before IPO
FY26 revenue stood at Rs. 349 cr, with EBITDA of Rs. 42 cr, implying 12% EBITDA margin. This EBITDA margin has more than doubled from 5% in FY23 and FY24, despite revenue CAGR of hardly 3% over FY23 to FY26.
Even for Q1FY27, on Rs. 107 cr topline, company’s EBITDA margin expanded further to 14% without any directly attributable reason. Q1FY26 period financials are not disclosed making comparison and analysis difficult.
PAT for FY26 stood at Rs. 27 cr, with net margin of 7.7%, which expanded to 9.6% in Q1FY27, as first quarter PAT rose to Rs. 10 cr. The margin expansion and profit growth without corresponding increase in volume raises questions on sustainability.
For the above-mentioned capex, company will be undertaking a large equity dilution of 27%, which will halve ROE of 33% to low-to-mid teens going forward.
