Businessman Sanjiv Saraf and his family aim to sell their promoter holding in Noida-based polyester film making firm Polyplex Corp. Ltd for at least ₹1,500 crore.
The sale comes as the equity market reflects a premium for the company’s shares against the backdrop of rising demand for packaging films, coatings and insulation products due to covid, said two people with direct knowledge of the plans.
“This is part of the company’s succession plan. The timing is opportune because its shares are appreciating with surging demand for polyester films,” said one of the two persons mentioned above.
The Sarafs holds a 50.97% stake as promoters in Polyplex, which has the world’s fifth-largest capacity to produce polyester films. This stake is valued at around ₹1,400 crore at current market value.
Polyplex has an integrated downstream capability of metallizing, holography, silicone coating, offline chemical coating, and extrusion coating.
As much as 73% of Polyplex’s products are used in packaging food products such as food pouches, rice bags, wafer bags, easy peeling cups of milk-based products and ready-to-serve noodles. These films are also used for packaging healthcare products such as sanitizers, liquid disinfectants and cleaning liquids.
“The demand for such packaging materials has increased exponentially after the covid-19 pandemic started. This is driving the company’s sales up rapidly,” said the first person.
Polyplex, which has appointed Goldman Sachs to look for buyers, supplies its products across 75 countries.
A spokesperson from Goldman Sachs declined to comment on the story. An email sent to Polyplex remained unanswered till press time.
Against the backdrop of a rapid growth in demand, Polyplex has been growing its business after diversifying its portfolio by commissioning a line with a capacity of 35,000 metric tonnes per annum in Bazpur, Uttarakhand.
“Rising demand and transfer of business control may together fetch the promoters at least a 20% premium for their shares on offer at the current market price,” said the first person. “Despite a rise in petrochemicals prices, demand is so high that the firm is witnessing a steady rise in revenues as well margins.”
In April-December FY21, Polyplex recorded a 10% year-on-year jump in revenues at ₹3,612 crore.
The demand for acquiring control in packaging companies has been growing. In April 2019, Blackstone acquired specialty packaging company Essel Propack for $460 million. In November 2020, Blackstone acquired glass packaging manufacturer Piramal Glass for $1 billion. On 4 February, Mint reported that Bain Capital is in talks to buy Daman-based Parksons Packaging Ltd for ₹3,000 crore.
