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SME-IPO bound, Pentagon Rubber aims to grow at 3X by 2025, riding on infrastructure sector demand
by Prashant Kapadia/NHN
Ramping up production capacity by 2.5 times – which will come online by December 2023 – leading to better economies of scale
Mohali-headquartered company filed the DRHP with NSE Emerge in March 2023
12th June, 2023: Pentagon Rubber, among the leading engineering component players and offering a wide range of rubber conveyor belts, transmission belts, rubber sheets and elevator belts, today laid out its growth plans for the next 24 months. The company plans to achieve 3X growth in revenues by March 2025 due to ongoing capacity expansion and strong demand from the domestic infrastructure sector, including Road construction, Cement, Steel and Chemicals. This Mohali-headquartered company has also filed DRHP with the NSE Emerge platform for its initial public offering.
As per the DRHP filed, the company’s total revenues were Rs. 35.12 crore for FY22 and Rs. 21.06 crore for H1FY23. The EBIDTA stood at 4.29 crore and 2.55 crore for FY22 and H1FY23, respectively. PAT stood at Rs. 3.09 crore for FY22 and Rs. 1.41 crore for H1FY23. The company’s present capacity stands at 240,000 metres, which, post its ongoing expansion, will increase to 600,000 metres by December 2023.
Commenting on the company’s growth strategy, Mr. Ashish Jain, Chairman & Managing Director, Pentagon Rubber Limited, said, “Client approvals and quality certifications are the biggest entry barriers in the precision engineering component space, including conveyor belting segment. Our sustained investments in research, quality, product range and efficiency have enabled us to establish our credentials in an overtly competitive space. Our products are successfully installed and operational in the most prestigious locations and facilities, making us one of the preferred partners to marquee clients. Given a robust foundation, we are now leading an orbital shift with the completion of the ongoing capacity expansion.”
The company’s objects to the issue as per the DRHP filed are towards meeting Working Capital Requirement, General Corporate Purpose and the Issue Expenses. The ongoing expansion has been entirely funded through its internal accruals and bank loans in the ordinary course of its business.
The company was incorporated in 2004, and its manufacturing unit is located at Dera Bassi, Punjab (25 KMS from Chandigarh city). Pentagon Rubber has one of India’s longest conveyor belting presses, with a production capacity of 21mtr in a single stroke. This technology allows the company to produce conveyor rubber belting up to 3150KN/m, making it one of the top manufacturers in India.
The production capacity is over 300 sq km of conveyor rubber belt per year. Besides, the company has a modern laboratory of international standards that can produce conveyor belts as per DIN, BS, IS, ISO, SABS, AS, GOST, and CAN standards. Owing to its certifications and product development prowess, the company is registered as an approved vendor with various Maharatna, Navratna, Miniratna, various MNCs and major Corporate Groups within the country and abroad.
The conveyor belting industry caters to the need of multiple industries around the efficient movement of goods and transmission, including core infrastructure sectors such as mining, power and roads.