– By Dilip Davda
- The company is engaged in the manufacturing of flexible packaging materials and also in trading activities.
- It is operating in a highly competitive and fragmented segment.
- It appears margins are inflated from FY25 onwards, to fetch fancy valuations for the IPO.
- Based on its recent average financial data with inflated margins, the issue appears fully priced.
- Only well-informed investors may consider parking moderate funds for medium term.
ABOUT COMPANY:
Vedant Poly Fabs Ltd. (VPFL) is engaged in the manufacturing of flexible packaging materials for businesses across India. The company operates as a B2B supplier and offers a diverse range of packaging products, including 3-layer and 5-layer LD films, shrink films, barrier films, printed laminates, and milk and oil pouches, catering to industries such as food & beverages and other consumer goods.
Since commencing operations, the company has expanded its product portfolio, strengthened its manufacturing capabilities, and established dedicated teams across sales, design, production, logistics, and dispatch. In March 2026, it further enhanced its manufacturing capacity by adding lamination, slitting, and pouching machines, while also installing a reprocessing unit to improve resource utilization and recycle manufacturing waste.
The company follows an integrated manufacturing process covering raw material procurement, film extrusion, printing, lamination, slitting, quality control, packing, and dispatch. Lamination segment has lion share in its total revenue followed by Printed Plastic products. VPFL manufactures products based on customer specifications, including size, thickness, material composition and printing requirements. Its operations are carried out through multiple stages such as extrusion, printing, lamination, slitting and pouching at manufacturing facility. Its facility is equipped with the necessary machinery to undertake these processes within its premises, including multilayer extrusion machines and printing machines such as CI (Central Impression) flexo and rotogravure. This enables it to carry out manufacturing activities in an integrated manner and cater to varied product requirements.
Its products are supplied to customers for packaging and distribution of their products across various industries. VPFL’s business model involves direct interaction with customers to understand their packaging requirements. It generally receives orders through verbal communications from customers and undertakes manufacturing based on the specifications communicated by them, including product dimensions, material composition, printing requirements, quantities and delivery schedules. Food and Beverages industry contributes lion share in its total revenue, followed by trading activities.
In addition to its manufacturing operations, it is also engaged in the trading of billets and MS (Mild Steel) strips. Billets and MS strips are used across industries such as engineering, fabrication, manufacturing and construction. These products are further processed by customers for the manufacture of rods, pipes, MS wire rods and other products used in infrastructure and construction-related applications. It undertakes trading of billets and MS strips based on customer requirements. The products are procured from vendors and supplied directly to customers without maintaining inventory at its facility. They are delivered directly from the source point to the end customer, thereby reducing the need for additional storage and handling. Through this activity, the company facilitates the supply of billets and MS strips to customers based on their requirements. The company is operating in a highly competitive and fragmented segment. As of June 30, 2026, it had 61 employees on its payroll. It hires contract workers as and when required.
ISSUE DETAILS/ CAPITAL HISTORY:
The company is coming out with its maiden book building route combo IPO of 6030000 equity shares of Rs. 10 each to mobilize Rs 56.68 cr. at the upper cap. The IPO consists of 5426400 fresh equity shares (worth Rs. 51.01 cr. at the upper cap) and an Offer for Sale (OFS) of 603600 equity shares (worth Rs. 5.67 cr. At the upper cap). The company has announced a price band of Rs. 88 – Rs. 94 per share. The minimum application to be made is for 2400 shares and in multiples of 1200 shares thereon, thereafter. The IPO opens for subscription on November 02, 2026, and will close on November 04, 2026. The IPO constitute 29.92% of the post-IPO paid-up capital of the company. The shares will be listed on NSE SME Emerge. From the net proceeds, it will utilize Rs. 24.61 cr. for incremental working capital, Rs. 8.00 cr. for repayment/prepayment of certain borrowings, Rs. 6.51 cr. for funding capex on purchase and installation of net plant and machinery at existing facility, and the rest for general corporate purposes.
The IPO is solely lead managed by Affinity Global Capital Market Pvt. Ltd., while Cameo Corporate Services Ltd., is the registrar to the issue. Giriraj Stock Broking Pvt. Ltd. is the market maker.
The company has issued initial equity capital at par value, and issued/converted further equity shares in the price range of Rs. 41.00 – Rs. 668.00 per share between March 2022, and March 2026. It has also issued bonus shares in the ratio of 50 for 1 in March 2025. The average cost of acquisition of shares by the promoters is Rs. 12.35, Rs. 17.67, and Rs. 20.21 per share.
Post-IPO, company’s current paid-up equity capital of Rs. 14.73 cr. (14725214 equity shares) will stand enhanced to Rs. 20.15 cr. (20151614 equity shares). Based on the upper band of the IPO pricing, the company is looking for a market cap of Rs. 189.43 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has reported a total income/net profit of Rs. 49.73 cr. / Rs. 0.64 cr. (FY24), Rs. 81.58 cr. / Rs. 4.56 cr. (FY25), and Rs. 115.31 cr. / Rs. 10.97 cr. (FY26). For Q1-FY27 ended on June 30, 2026, it earned a net profit of Rs. 3.48 cr. on a total income of Rs. 30.49 cr. Quantum jump in bottom lines from FY25 onwards raise eyebrows and concern over its sustainability. Its trade receivables stood at Rs. 41.00 cr. for Q1 of FY27, raising alarm as it has overshot its top line for the said period. Its contingent liability stood at Rs. 1.84 cr. as of June 30, 2026. Its debt-equity ratio stood at 0.98 as of June 30, 2026.
For the last three fiscals, the company has reported an average EPS of Rs. 6.52, and an average RoNW of 25.58%. The issue is priced at a P/BV of 3.04 based on its NAV of Rs. 30.97 per share as of June 30, 2026, and at a P/BV of 31.02 based on its post-IPO NAV of Rs. 3.03 per share at the upper cap. While the company has made its offer document available on public domain only by noon of October 30, 2026, it appears that the company erred for the info on its post-IPO NAV data (refer page no. 157 of the offer document.
If we attribute FY27 annualized super earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 13.62, and based on FY26 earnings, the P/E stands at 17.28. The issue appears reasonably priced, based on its average earnings. Its outperforming margins compared to listed peers is a big surprise. It appears the inflated margins post FY25 appears a window dressing to fetch fancy valuations for the IPO.
For the reported periods, the company has posted PAT margins of 1.28% (FY24), 5.63% (FY25), 9.52% (FY26), 11.48% (Q1-FY27), and RoCE margins of 16.94%, 43.66%, 30.65%, 8.93%, respectively, for referred periods.
DIVIDEND POLICY:
The company has not paid any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy, based on its future prospects, and financial performance.
COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown B & A Packaging, Barflex Poly, RFBL Flexi, as its listed peers. They are currently trading at a P/E of 12.5, 49.5, and 25.6 (as of October 30, 2026). However, they are not truly comparable on an apple- to apple basis. This comparison appears as an eyewash.
MERCHANT BANKER’S TRACK RECORD:
This is the 12th mandate from Affinity Global Capital Market Pvt. Ltd., in the last four fiscals (including the ongoing one). Out of the last 11 listings, 4 opened at discount, 3 opened at par, and the rest with a premium ranging from 5.88% to 51.79% on the listing date. The lead manager has an average track record so far.
CONCLUSION:
VPFL is engaged in the manufacturing of flexible packaging materials and also in trading activities. It is operating in a highly competitive and fragmented segment. Its higher net margins compared to listed peers is a big surprise. It appears margins are inflated from FY25 onwards, to fetch fancy valuations for the IPO. Its debt equity ratio of 0.98 as if June 30, 2026 raise alarm. Based on its recent average financial data with inflated margins, the issue appears fully priced. Only well-informed investors may consider parking moderate funds for medium term.
Review By Dilip Davda on August, 2026
Review Author
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detailed fundamental and financial analysis of companies coming up with IPOs helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
