Sillverton Industries Limited IPO

01At a glance

What the company does — manufactures eco-friendly specialty paper — writing and printing paper, kraft paper, cupstock paper and other specialised grades — for education, government and corporate users, packaging and FMCG, food and beverage and quick-service restaurants, labels and stationery, and pharmaceutical packaging (DRHP p.27). It also runs a packaged drinking water bottling plant under a three-year contract-manufacturing arrangement with Energy Beverages Private Limited (DRHP p.210).

Who pays it — mostly dealers, through whom 96.71% of revenue in the nine months to December 2024 was earned; it worked with 191 dealers in that period (DRHP p.41).

Why it is raising money — ₹1,293.91 million for a 14 MW waste-to-energy captive power plant and a compressed bio-gas plant, ₹252.49 million for rewinder and sheeter capacity and warehouses, ₹720.00 million to repay borrowings, and the rest for general purposes (DRHP p.28).

How fast it has grown — revenue from ₹6,187 million in FY22 to ₹8,660 million in FY23 and ₹8,796 million in FY24, and ₹7,452 million in the nine months to December 2024 (DRHP p.30).

The one thing to understand — a paper maker moving from commodity kraft paper toward cupstock and specialty grades, with rising margins but lumpy cash flow. Kraft paper fell from 49.12% of revenue in FY22 to 21.24% in the nine months to December 2024, while cupstock rose from almost nothing to 18.75%, and EBITDA margin rose from 11.64% to 17.61%; operating cash flow was negative ₹240.56 million in FY24 (DRHP p.53, DRHP p.143, DRHP p.210).

02The business, in plain words

A paper mill makes paper on its machines, finishes it into grades for printing, packaging or food use, and sells them mostly through dealers to printers, converters and packaging makers.

A cup maker needs cupstock board for paper cups → it orders through a Sillverton dealer → the mill makes the grade and ships the reels → the dealer pays the company on agreed terms.

Earnings equation: Profit ≈ tonnes sold × (price − pulp, chemicals and power) − overheads − interest. EBITDA margin was 17.61% in the nine months to December 2024 (DRHP p.143).

03Where the money comes from

Source: DRHP p.210.

04The growth record

Source: DRHP p.53, DRHP p.143.

05What the growth is made of

Capacity and mix. Paper-making capacity rose from 216,000 to 270,000 tonnes a year in FY24, and cupstock and specialty grades grew as kraft paper shrank (DRHP p.143, DRHP p.210). Revenue grew 19.24% a year from FY22 to FY24 (DRHP p.143).

06Earnings quality

Operating cash flow of ₹1,727.42 million over FY22 to the nine months to December 2024 compares with profit of ₹2,696.85 million, with FY24 negative (our arithmetic, DRHP p.53, DRHP p.143). Inventory days rose from 48 in FY23 to 80 in the nine months to December 2024 (DRHP p.143). Investing outflows were ₹1,233.33 million in the nine months (DRHP p.53).

07The balance sheet

Source: DRHP p.30, DRHP p.143.

08What the money is for

Source: DRHP p.28.

09Who is selling

Source: DRHP p.28, DRHP p.29, and the addendum notice of 14 August 2026. The fourth and last rows are our arithmetic. The shares offered are 13.12% of the company (our arithmetic). Shares acquired in the last three years cost a weighted average of ₹0.35 a share (DRHP p.35).

10Promoters

The promoters are Akshay Jain, Rajeev Jain, Rajesh Jain, Monica Jain and Sanjeev Jain, who hold 57.47%; the rest is held by family members and family HUFs in the promoter group (DRHP p.27, DRHP p.28, DRHP p.29). One statutory proceeding that is also criminal in nature is pending against the company and the promoter directors (DRHP p.31).

11Who already owns it

Source: DRHP p.28, DRHP p.29. There are no shareholders outside the promoters and promoter group (DRHP p.30).

12What changed just before the IPO

• Name — renamed Sillverton Industries Limited in 2025 (addendum notice, 14 August 2026).
• Cupstock — from almost nothing to nearly a fifth of revenue (DRHP p.210).
• Water bottling — a packaged drinking water plant under a contract-manufacturing arrangement (DRHP p.210).

13Capacity and expansion

Paper-making capacity of 270,000 tonnes a year (DRHP p.143). The proceeds fund captive waste-to-energy power, a bio-gas plant, finishing capacity and warehouses rather than more paper machines (DRHP p.28).

14Market size and industry structure

The CRISIL report cited in the offer document says global paper output grew from 394 million tonnes in 2019 to 420 million tonnes in 2024, with paperboard rising from 73% to 77% of it (DRHP p.27). The figures are CRISIL's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• Product range — printing, kraft, cupstock and specialty grades from one mill (DRHP p.27).
• Dealer network — about 190 to 220 dealers (DRHP p.41).
• Returns — return on equity of 26.74% in FY24 (DRHP p.143).

Against that: dependence on dealers, one location, rising inventory and borrowings, and a peer group valued at low multiples (DRHP p.41, DRHP p.140, DRHP p.143).

16Peers the company named

Source: DRHP p.141. The table also lists Kuantam Papers; the peers' average P/E is 5.52 (DRHP p.140).

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Dealers. Nearly all revenue through dealers (DRHP p.41).
• Cash. Operating cash flow negative in FY24 (DRHP p.53).
• Inventory. Inventory days up to 80 (DRHP p.143).
• Old figures. The DRHP's latest figures are to December 2024 (DRHP p.30).
• Family exit. Family shareholders offer 13% of the company (DRHP p.27).

18Litigation and regulatory matters

Source: DRHP p.31. One regulatory proceeding against the company and the promoter directors is also criminal in nature (DRHP p.31).

19Related-party transactions

Not read in detail for this study.

20What the offer document does not say

In the sections read for this study, the document does not give:

• Figures for FY25 and FY26, which are in the addenda not read for this study.
• Customer concentration in a form found in the pages read.
• What the proceeding that is criminal in nature concerns, in the pages read.
• How much the waste-to-energy plant will save, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. What did FY25 and FY26 look like, as set out in the addenda?
2. How much power cost will the waste-to-energy plant save?
3. Why did operating cash flow turn negative in FY24?
4. How durable is cupstock demand at current margins?
5. Why are family HUFs offering shares while the company borrows?

1Sources and cited facts

This study was read from 1 document the company filed. The 27 figures it cites are listed under the document each came from, with the page and the sentence as printed.