HP Adhesives IPO: Opens tomorrow; find key details that investors must know before investing

HP Adhesives Limited, an adhesive and sealants company, will launch its initial public offering (IPO) tomorrow, i.e., on Wednesday, December 15, 2021. The three-day issue will close on Friday, December 17, 2021.

The company has fixed a price of Rs 262-274 per equity share, at a face value of Rs 10 each. A retail investor can place a bid for a minimum of 50 equity shares and in multiples thereof. Retail investors can invest a minimum of Rs 13,700 for a single lot and their maximum investment is Rs 1,91,800 for 14 lots.

The company has plans to raise up to Rs 126 crore from the primary market. The maiden issue comprises an initial public offer of 45,97,200 equity shares which includes a fresh issue of 41,40,000 equity shares worth Rs 113.44 crore and an offer for sale (OFS) of 4,57,200 equity shares by shareholder Anjana Haresh Motwani aggregating up to Rs 12.53 crore.

Of the net issue, 75 per cent is reserved for qualified institutional buyers, 15 per cent for non-institutional bidders, and 10 per cent for retail investors.

The company will use the net proceeds from the fresh issue for funding the working capital requirements of the company and funding capital expenditure for expansion of production capacity at the existing manufacturing facility at Village Narangi, Raigad, Maharashtra and at the additional unit having a proposed construction area admeasuring about 4,532.57 sq. mtrs. (built-up) area on the adjacent plot. ("Proposed Expansion"):

• To expand our existing installed capacities for the existing product lines; and
• To enable us to also add new products to our existing product portfolio.

The proceeds will also be used for general corporate purposes.

Unistone Capital Private Limited has been appointed as the book running lead manager of the issue and Bigshare Services Private Limited is the registrar for it. Shares of HP Adhesives will list on the BSE and the National Stock Exchange on December 27, 2021.

HP Adhesive is a fast-growing multi-product, multi-category consumer adhesives and sealants company. For its largest product category – PVC solvent cement, the company is amongst the leading manufacturing companies in India in the consumer/ bazaar segment of the adhesive industry. (Source: CRISIL Research).

It manufactures a wide range of consumer adhesives and sealants such as PVC, cPVC and uPVC solvent cement, synthetic rubber adhesive, PVA adhesives, silicone sealant, acrylic sealant, gasket shellac, other sealants and PVC pipe lubricant which are sold across India, through an extensive distribution network of distributors, and exported also to several countries, through a network of distributors and direct customers. We also manufacture these products for select large PVC pipe manufacturing companies under co-branding or private label on an order basis. Apart from the above products, it also sells ancillary products like ball valves, thread seal and other tapes and FRP products for drainage and architectural solutions that are distributed along with our products to the end[1]customers through our distribution network.

As of September 30, 2021, HP Adhesives distribution network comprised of 4 depots situated in Delhi, Kolkata, Bengaluru and Indore and more than 750 distributors who cater to more than 50,000 dealers in India. Its sales team works closely with our distributors and end-appliers to obtain their insights and feedback about the upcoming trends in the industry which enables us to formulate an effective strategy for product development, sales, marketing and pricing.