Bhavik Enterprises
- Bhavik Enterprises is coming out with an initial public offering (IPO) of 55,00,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 140 per equity share.
- The issue will open on September 25, 2025 and will close on September 30, 2025.
- The shares will be listed on SME Platform of BSE.
- The share is priced at 14.00 times higher to its face value of Rs 10.
- Book running lead manager to the issue is Smart Horizon Capital Advisors.
- Compliance Officer for the issue is Nikhil D Bhatt.
Profile of the company
Incorporated on September 15, 2008, Bhavik Enterprises is engaged in trading of polymers primarily in Polyethylene (PE) and Polypropylene (PP) which has a wider usage and application in various industries such as packaging, infrastructure, agriculture and many more. The company provides a broad range of products to its customers which increases the scope of its customers and its ability to cater to a diversified clientele base. The company’s comprehensive product portfolio under Polyethylene (PE) includes LLDPE, LDPE, HDPE and MLLDPE. Under Polypropylene (PP), its product portfolio consists of Homo polymer, Impact Co-polymer and Random Co-polymer. The company’s business model emphasizes 'Stock & Sale' catering to small, medium and large customers as per their requirement.
The company is presently engaged in the domestic B2B trading of polymer, wherein it imports the material and stores the same at its warehouses and depots and sells them thereafter to manufacturer of plastic product. These end use customers include manufacturers of pressure pipes, non-pressure pipes, drip pipe, shrink film, lamination film, mulch film, greenhouse films, CPP films, liners, EPE foam, woven sack bags, spun bond nonwoven fabric, paint pails, crates, houseware products, suitcases, thin wall containers.
The company is an authorized distributor of Borouge Pte Ltd to market and sell “Borouge” products in India. Borouge Pte Ltd is a Singapore based multinational company which is engaged in manufacturing and distribution of Polyethylene (PE) and Polypropylene (PP) and related compounds. It also shares business relation with another petrochemical multinational company i.e., Basell International Trading FZE, a Dubai based Company from whom it is regularly importing the “LyondellBasell” products and sell it in India. Basell International Trading FZE is the producers of versatile plastic resins, such as polypropylene, polypropylene compounds and polyethylene. It imports the products from these overseas suppliers and sells it in domestic market as per prevailing market price.
Proceed is being used for:
- Funding working capital requirements of the company
- General corporate purposes
Industry Overview
Indian chemical sector continues to grow at a rate of 1.2-1.5 times the GDP. India's chemical and petrochemical industry is currently valued at around $178 billion and is expected to reach $300 billion by 20253. The Ministry of Petroleum estimates that demand for petrochemicals will triple by 2040, reaching a value of $1 trillion. India ranks as the sixth largest player in the global petrochemical market. The industry boasts a strong production base with three gas-based and three naphtha-based cracker complexes for producing key products like ethylene and xylene. Annual production of basic petrochemicals in India is estimated to be 17.8 million metric tons in FY 2023 (till January 2024) while production is estimated to be nearly 44.6 million metric tons in FY 2022. Between FY 2020 and 2022, the production of petrochemicals has increased by a CAGR of 1.2%.
Olefins & Polymers segments together, with a combined contribution of 56%, represent the backbone of the Indian petrochemical industry. Olefins, like ethylene and propylene, are the fundamental building blocks for various polymers, including polyethylene (PE), polypropylene (PP), and PVC. These polymers are widely used in packaging, construction, textiles, and numerous other applications. The Indian polymers industry has witnessed a dynamic growth trajectory in recent years. Production peaked at 12,471 thousand metric tons in FY2022, followed by a decline to 11,487 thousand metric tons in FY2023. This fluctuation can be attributed to various factors, including global economic conditions, fluctuations in raw material prices, and changes in consumer demand. Further, The Indian Polypropylene (PP) industry has witnessed notable production fluctuations in recent years. Total PP production peaked at 5,240.7 thousand metric tons in FY2022, followed by a decline to 4,773.5 thousand metric tons in FY2023. This fluctuation can be attributed to various factors, including global economic conditions, fluctuations in raw material prices, and changes in consumer demand.
The Indian polyethylene (PE) industry has witnessed a notable production trend in recent years. Total PE production, encompassing both LLDPE/HDPE and low-density PE, peaked at 5,504.88 thousand metric tons in FY2020 and subsequently declined to 4,767.41 thousand metric tons in FY2023. This decline can be attributed to various factors, including global economic fluctuations, shifts in consumer demand, and potential challenges within the industry. This sustained growth in polymers consumption presents both opportunities and challenges. While it signifies a thriving economy and expanding industrial base, it also necessitates a focus on sustainable practices. The industry must prioritize the development and adoption of eco-friendly polymers, improve recycling infrastructure, and minimize environmental impact. Additionally, addressing concerns related to plastic waste management and promoting circular economy principles will be crucial for the long-term sustainability of the Indian polymers market.
Pros and strengths
Wide product portfolio having applications across various industries verticals: The company is engaged primarily in trading of Polyethylene (PE) and Polypropylene (PP) which has a wider usage and application in various industries including but not limited to pressure pipes, non-pressure pipes, drip pipe, shrink film, lamination film, mulch film, greenhouse films, CPP Films, liners, EPE Foam, Woven Sack bags, Spun Bond Non-woven fabric, paint pails, crates, houseware products, suitcases, thin wall containers. It provides a broad range of products to its customers which increases the scope of its customers and its ability to cater to a diversified clientele base. Its comprehensive product range offers a wide variety of grades and caters to various customer segments, by providing products at various price ranges. Its comprehensive range of products enables it to capitalize on growth opportunities and demand in its industry.
Well established relationship with suppliers: The company focuses on building sustained and long-term relationship with its suppliers. Its long-term relationships with suppliers will enable it to continue to grow its business. The company is associated with its top suppliers Borouge Pte Ltd from incorporation of the Company. Before incorporation of the company, its promoter’s partnership firm namely M/s Bhavik Enterprises has been appointed authorized distributor of Borouge Pte Ltd. The company is also associated with Basell International Trading FZE, more than 8 years. Being authorized distributor of Borouge Products, it is able to procure material on regular basis. This enables it to manage its inventories and supply quality products on timely basis to its customers. This in turn has enabled it to generate repeat business.
Debt free structure: The company is not burdened by the risks and costs associated with borrowings, which provide greater financial flexibility, allowing it to allocate its resources efficiently and make strategic decisions without the pressure of meeting debt repayments or managing interest expenses. As a result, the company can reinvest more of its earnings directly back into the business, enhancing its capabilities, expanding its offerings, and driving further growth. Furthermore, its debt-free position has greatly improved its creditworthiness. The company has consistently maintained a strong balance sheet, with a high equity-to-debt ratio, which enhances its reputation. This has made it easier for it to invest in growth opportunities, without being encumbered by liabilities.
Risks and concerns
Purchase majority of product from single supplier: The company has derived its revenue from trading of polymers for which it is dependent on certain suppliers for its operations and an increase in the cost of, or a shortfall in the availability or quality of such products could have an adverse effect on its business, financial condition and results of operations. The company has bought 79.65%, 85.35% and 86.71% of its product from single supplier in FY25, FY24 and FY23 respectively. The company usually does not enter into long-term supply contracts with any of its products suppliers and typically sources products from these suppliers on monthly basis. The absence of long-term contracts at fixed prices exposes it to volatility in the prices of products that it requires, which may reduce its profit margins.
Geographical constrain: The company derives revenue from the domestic market and substantial portion of revenue from the state of Gujarat and Maharashtra. The company has garnered 45.21%, 43.39% and 39.76% of its total revenue from Gujarat in FY25, FY24 and FY23 respectively. Moreover, the company has garnered 27.46%, 22.67% and 22.58% of its total revenue from Maharashtra in FY25, FY24 and FY23 respectively. Such geographical concentration of its business in these regions heightens its exposure to adverse developments related to competition, as well as economic and demographic changes in these regions which may adversely affect its business prospects, financial conditions and results of operations.
High working capital requirement: The company’s business demands working capital requirements. In case there are insufficient cash flows to meet its working capital requirement or it is unable to arrange the same from other sources or there are delays in disbursement of arranged funds, or it is unable to procure funds on favourable terms, it may result into its inability to finance its working capital needs on a timely basis which may have an adverse effect on its operations, profitability and growth prospects. It intends to continue growing by expanding its business operations. This may result in increase in the quantum of its current assets. The company’s inability to maintain sufficient cash flow, credit facility and other sources of fund, in a timely manner, or at all, to meet the requirement of working capital could adversely affect its financial condition and result of its operations.
Outlook
Bhavik Enterprises is engaged in trading of polymers primarily in Polyethylene (PE) and Polypropylene (PP) which has a wider usage and application in various industries such as packaging, infrastructure, agriculture and many more. The company has wide product portfolio having applications across various industries verticals. On the concern side, the company derives its revenue from trading of polymers for which it is dependent on certain suppliers for its operations and an increase in the cost of, or a shortfall in the availability or quality of such products could have an adverse effect on its business, financial condition and results of operation. Moreover, it derives its revenue from the domestic market and substantial portion of revenue from the western region of India and the Union Territory of Dadra and Nagar Haveli and Daman and Diu i.e. Daman & Silvassa. Any adverse developments affecting its operations in western region could have an adverse impact on its revenue and results of operations.
The company is coming out with an IPO of 55,00,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 140 per equity share to mobilize Rs 77.00 crore. On performance front, the company’s revenue from operations increased by 6.71% to Rs 52,726.71 lakh for Fiscal 2025 from Rs 49,412.37 lakh for Fiscal 2024. However, profit after tax has decreased substantially by 28.00% from Rs 789.12 lakh for Fiscal 2024 to Rs 568.19 lakh for Fiscal 2025.
The Indian polymers market has witnessed a significant growth trajectory in recent years, driven by robust economic growth, increasing urbanization, and rising disposable incomes. Total polymers consumption surged from 14,218.40 thousand metric tons in FY 2020 to 15,689.60 thousand metric tons in FY2023, reflecting a consistent upward trend. This substantial increase underscores the growing demand for polymers across various sectors within the Indian economy. The company’s strategy for expanding its global presence and driving growth in domestic markets revolves around strengthening its existing operations and entering new regions. It focuses on leveraging its understanding of the polymers industry to identify emerging opportunities worldwide. Domestically, the company aims to increase its market share by improving product offers and expanding its distribution footprint. This includes optimizing supply chains, and meeting the growing demand for polymers across India.
