Promoted by Deen Dayal Daga, Shyam D. Daga, Rajiv D. Daga and Assam Timber Products, Archidply Industries was incorporated in 1995. It has modern manufacturing facilities for wood panel products and decorative surfacing products in Rudrapur (Uttarakhand) and Mysore (Karnataka).
The combined production capacity of plywood and block boards (4mm) is 1,28,00,000 square meters (sq mt), plain particleboards (4mm) 1,12,50,000 sq mt, pre-laminated particleboard (4mm), 99,00,000 sq mt, decorative veneers (4mm) 37,50,000 sq. mt, and decorative laminates of 12,00,000 sheets.
The range of comprehensive engineered interior products include plywoods such as marine plywood; fire retardant plywood; shuttering plywood; densified film faced plywood; BWR and MR plywood; lamyply and lamyboard; block boards and flush doors of BWR and MR grade; particle boards such as plain, veneered and pre-laminated both in interior and exterior grades; decorative laminates; and decorative veneers such as teak, natural exotic veneers, reconstituted veneers and dyed veneers.
The brand, Archidply, has been positioned in the premium segment of the wood panel and decorative surfacing products. Brands for the middle segment (Sec B) are Silvi and premium plywood products Pureply.
The marketing network includes 16 marketing offices, 61 distributors and stockiest and 586 authorised dealers.
A new manufacturing facility of plain particle boards, pre laminated board and decorative plywood, to be set up at a cost of Rs 37.67 crore at Chintamani in Karnataka, is to be commissioned by October 2008. A new manufacturing capacity for medium density fibreboard (MDF), to be set up at a cost of Rs 26.18 crore at Rudrapur, will be commissioned by August 2009. The total capital requirement is Rs 83.04 crore inclusive of future operating and working capital requirement. As such, Rs 46.31 crore to Rs 52.92 crore is to be raised in the price band of Rs 70 to Rs 80 per share through an initial public offering (IPO). Term loan will constitute Rs 28 crore.
Strengths
Enjoys various tax benefits. The Rudrapur unit has received approval for thermal energy generation from renewable biomass, making eligible for 24,659 certified emission reductions (CER) annually.
Weaknesses
Faces intense competition from unbranded products from the unorganised sector of the wood-based industry. There are many strong local brands,too. Moreover some organised players are much larger than Archidply.
Yet to receive licence to manufacture MDF at Rudrapur.
Valuation
Archidply has set a price band of Rs 70 to Rs 80 per equity share of Rs 10 face value. At the lower price band, the P/E would be 10.3 times and at the upper price band, the P/E would be 11.8 times the EPS for financial year ended March 2008 (FY 2008) on post-issue equity of Rs 22 crore. In the decorative wood-based/ laminates segment, comparable companies such as Greenply industries, Uniply Industries and Novopan Industries have TTM P/E of around 8, 6.6 and 8.1, respectively.