IPO Central brings you an in-depth, well-researched, and unbiased IPO review which helps retail investors to make an informed decision before investing. The Shreenath Paper IPO review shed light on the company’s financial performance, valuation metrics, industry trends, and potential risks.
Table of Contents
1. Quick Snapshot
- Company Name & Business: Shreenath Paper Products Limited (SPPL) specializes in manufacturing and supplying coated-based paper products. The company primarily serves industries requiring specialized paper solutions, including FMCG, food packaging, and printing.
- IPO Dates:
- Open Date: 25 February 2025
- Close Date: 28 February 2025
- Allotment Date: 3 March 2025
- Listing Date: 5 March 2025
- Issue Price & Lot Size: INR 44 per share, with a lot size of 3,000 shares
- Minimum Investment Required: INR 1,32,000
- Listing Exchange: SME Platform of BSE (BSE SME)
Shreenath Paper IPO review is particularly relevant for retail and non-institutional investors looking for exposure to the growing coated paper products sector. With sustainability trends driving demand in FMCG and packaging industries, SPPL positions itself as a strong player in a niche segment.
2. Company & Business Model (Why It Matters to You)
Business Overview
SPPL provides coated paper products used in various industries, including FMCG, packaging, and printing. The increasing demand for sustainable and recyclable packaging gives the company a competitive advantage. Its core operations include developing high-quality coated paper solutions that cater to specific industry needs, making it a crucial supplier for companies focused on eco-friendly alternatives.
Pros and Cons of Business Model
Established supplier in the coated paper niche with long-standing industry relationships Strong demand from FMCG and packaging sectors due to sustainability trends Focus on high-quality manufacturing with an emphasis on environmental responsibility
Vulnerability to raw material price fluctuations (pulp & chemicals), which can impact margins Competitive market with multiple organized and unorganized players offering similar products SME listing entails lower liquidity compared to mainboard stocks, affecting investor exit strategies
Comparison with Listed Peers
Shreenath Paper Products has the highest RoNW at 23.19% which outperforms JK Paper (19.82%), Seshasayee Paper (14.12%), and Star Paper Mills (9.89%). It indicates superior return generation. However, the company’s PE ratio stands at 14.33 which is significantly higher than JK Paper and Seshasayee Paper (both at 6.78) and Star Paper Mills (4.51), suggesting a premium valuation compared to its peers.
Industry Trends
- The packaging industry is witnessing exponential growth due to increased e-commerce activity and sustainability regulations.
- Industry-wide consolidation and efficiency improvements are benefiting well-managed players.
- Government policies encouraging eco-friendly packaging create opportunities for niche players like SPPL.
- The adoption of digital alternatives to paper packaging is a potential long-term risk.
3. IPO Objectives: Where Will the Money Go?
Fund Utilization
- Meeting incremental working capital requirements – INR 18.00 crore to ensure smooth business operations and financial stability.
- General corporate purposes – INR 2.87 crore to support business expansion, enhance operational efficiency, and strengthen the company’s financial position.
- Total fund deployment – INR 20.87 crore, reflects the company’s intent for sustainable growth and value creation.
Investor Impact
Since the IPO proceeds are dedicated to expansion and operational improvements rather than a promoter exit, it signals strong growth intent from the management. This is generally seen as a positive indicator for long-term investors.
4. Financial Performance
| FY 2022 | FY 2023 | FY 2024 | 9M FY 2025 | |
| Revenue | 135.98 | 204.44 | 185.85 | 77.04 |
| Expenses | 139.96 | 200.82 | 183.77 | 75.31 |
| Net income | 1.34 | 4.38 | 4.39 | 2.41 |
Debt Levels
- Debt-to-Equity Ratio: 0.5 (Moderate leverage, financially stable with a well-balanced capital structure)
Liquidity & Cash Flow
- Current Ratio: 4.09 (indicating strong liquidity and financial health)
- Positive operational cash flow, but dependent on the receivables cycle, which is a key area to monitor for sustainability.
5. Shreenath Paper IPO Review – Valuation Test By Investing Ratios
8 magical investing ratios tell the wholesome story about the IPO. Let’s check according to this:
Key Valuation Ratios
- Price-to-Earnings (P/E) Ratio: 14.33x (competitive pricing for an SME IPO)
- Price-to-Sales (P/S) Ratio: 0.46 (indicative of a reasonable valuation compared to revenue)
- Price-to-Book (P/B) Ratio: 3.33 (slightly above ideal levels but within industry norms)
- PEG Ratio: 0.06 (suggests high growth potential at a reasonable price)
Industry Peer Comparison
- The IPO is priced in line with small-cap peers like Astron Paper and Genus Paper.
- Large players like JK Paper have higher valuation multiples, making SPPL an affordable alternative.
Verdict on Pricing: The IPO is fairly valued with potential for listing gains. However, liquidity concerns should be taken into account.
6. Shreenath Paper IPO Review – Key Strengths & Risks
Why You Might Want to Invest:
- Strong revenue and profit growth trends
- Exposure to the rapidly expanding packaging industry
- Promoters retaining significant post-IPO stake (signalling confidence in the company’s future)
- No OFS, reinforcing that capital is being raised for expansion, not promoter exit
- Industry tailwinds support sustained long-term growth
Why You Might Want to Avoid:
- Limited liquidity on the SME platform, making quick exits difficult
- Dependence on raw material prices, which can impact margins
- Competition from larger and well-established industry players
- Potential impact of digital packaging alternatives in the long run
7. Analyst’s Verdict: Buy, Hold, or Skip?
Who Should Apply?
Risk-tolerant investors seeking SME growth opportunities Those interested in niche packaging and eco-friendly businesses Investors willing to hold long-term despite lower liquidity
Who Should Avoid?
Conservative investors looking for large-cap stability Investors needing high liquidity and easy exit strategies
Listing Gains & Long-Term Potential
- Listing Gains? High probability due to reasonable pricing and strong SME investor interest.
- Long-Term Potential? Moderate to high – with strong industry tailwinds, but competition and liquidity risks exist.
8. Final Verdict: Should You Invest?
Shreenath Paper IPO review provides you with in-depth details about the company’s business model, its upsides and downsides. SPPL IPO provides an opportunity for investors interested in the niche, high-growth eco-friendly packaging industry. The company reported consistent revenue growth and it can benefit further from strong market trends. However, SME stocks come with lower liquidity risks, and investors should be prepared for long-term holding. Shreenath Paper IPO’s valuation appears fair, suggesting an attractive opportunity for growth-oriented investors.
There might be some hiccups due to ongoing correction in the market but staying invested in the SME market for the long term may provide multibagger returns.
Overall Rating: 
☆ (4.5/5)
Recommendation: Ideal for growth investors comfortable with SME volatility and long-term holding strategies.