The Indian SME IPO market has been witnessing significant activity, and 3B Films has emerged as one of the interesting stories in the packaging sector. With the IPO closing on June 3rd, 2025, after opening on May 30th, retail investors are scrambling to understand whether this Gujarat-based plastic films manufacturer deserves a spot in their portfolios.
I’ve learned that every public offering tells a story – some triumphant, others cautionary. 3B Films’ journey from a 2014 startup to a Rs 33.75 crore IPO candidate presents both compelling opportunities and noteworthy concerns that investors must carefully weigh.
What Does 3B Films Actually Do?
At its core, 3B Films specializes in manufacturing Cast Polypropylene (CPP) and Cast Polyethylene (CPE) films – essential components for packaging across food & beverages, garments, floriculture, and consumer goods industries. Think of them as the invisible heroes behind the packaging you see daily in supermarkets and retail stores.
The company has positioned itself beyond basic commodity production, offering specialized variants including transparent, metalized, white opaque, retort, anti-fog, easy-peel, and EVOH films. This diversification strategy indicates management’s understanding that survival in the packaging industry requires continuous innovation rather than competing solely on price.
Founded by Chairman & MD Ashokbhai Dhanjibhai Babariya, the company has demonstrated impressive growth metrics. Recent investments in imported machinery have doubled their production capacity to 750 metric tonnes per month (9,000 MT annually), showcasing management’s commitment to scaling operations efficiently.
The Numbers Game: Financial Performance Snapshot
3B Films reported operational revenue of Rs 56.8 crores by December 2024, with an EBITDA of Rs 11.96 crores and profit after tax of Rs 4.20 crores. While these figures reflect operational proficiency, investors should benchmark these numbers against industry peers and growth sustainability factors.
The company’s expansion strategy includes forward integration through printing and lamination lines, allowing them to move up the value chain by offering products closer to end-use requirements. This strategic positioning could potentially improve margins and reduce dependence on commodity-level pricing pressures.
IPO Structure: Fresh Money vs. Promoter Exit
The Rs 33.75 crore IPO comprises two components:
Fresh issue: Rs 17.76 crore (35.52 lakh shares)
Offer for Sale (OFS):Rs 15.99 crore (31.98 lakh shares)
The fresh issue proceeds will fund capital expenditures, working capital requirements, and general corporate purposes – direct investments in company growth. However, the significant OFS component means nearly half the IPO proceeds go to promoters rather than company coffers, which investors should factor into their decision-making.
Market Reception: Strong Retail Interest
The subscription numbers tell an interesting story. By Day 2, the IPO achieved 1.34 times overall subscription, with retail investors showing remarkable enthusiasm at 1.93 times subscription. This retail confidence often translates into positive listing momentum, though it’s worth noting that Non-Institutional Investors subscribed only 76% of their allocated portion.
The Grey Market Premium (GMP) of Rs 3 suggests an estimated listing price of Rs 53, representing a 6% premium over the Rs 50 issue price. While modest, this positive GMP indicates market optimism about the company’s near-term prospects.
The Positive Case: Why 3B Films Could Succeed
Growing Packaging Demand: India’s packaging industry continues expanding, driven by e-commerce growth, changing consumer preferences, and increasing organized retail penetration. 3B Films is well-positioned to capitalize on this structural growth.
Innovation Focus: The company’s emphasis on specialized films and sustainable solutions aligns with global trends toward environmentally conscious packaging. Their commitment to “recyclable and sustainable film solutions” could provide competitive advantages as regulatory pressures increase.
Capacity Expansion: The doubling of production capacity demonstrates management’s growth ambitions and operational capabilities. The addition of forward integration capabilities could improve profitability and customer relationships.
Strong Retail Backing: Robust retail investor interest often creates positive listing dynamics and provides a supportive shareholder base during initial trading phases.
The Concerns: Red Flags to Consider
SME Platform Limitations: Listing on BSE’s SME platform means potentially lower liquidity compared to main board stocks. This could impact ease of buying/selling, especially for larger positions.
Promoter Selling: The significant OFS component raises questions about promoter confidence in the company’s immediate growth prospects. Why are they reducing stakes if the future looks exceptionally bright?
Industry Competition: The packaging films industry faces intense competition, with established players and commodity pricing pressures. 3B Films must continuously innovate to maintain margins and market share.
Limited Track Record: Founded in 2014, the company has a relatively short operating history compared to industry veterans. Economic cycles and market downturns could test management’s crisis navigation capabilities.
Environmental Concerns: Despite sustainability claims, the company operates in the plastics sector, which faces increasing regulatory scrutiny and potential policy changes that could impact operations.
Valuation Perspective: Is Rs 50 Fair?
Without detailed P/E ratios or comparison metrics in the available information, investors must conduct independent valuation analysis. The Rs 50 price point should be evaluated against the company’s growth prospects, industry multiples, and risk factors.
The modest GMP suggests the market isn’t expecting explosive gains, which could indicate realistic pricing rather than speculative enthusiasm.
Investment Verdict: Proceed With Caution
3B Films presents a mixed investment proposition. The company operates in a growing sector with demonstrated operational capabilities and expansion plans. Strong retail interest and positive (though modest) grey market indicators suggest reasonable near-term prospects.
However, concerns about promoter selling, SME platform limitations, and competitive industry dynamics warrant careful consideration. The investment case depends heavily on individual risk tolerance and portfolio diversification needs.
For aggressive investors seeking SME exposure in the packaging sector, 3B Films could merit consideration as a small portfolio allocation. Conservative investors might prefer waiting for more track record or seeking established packaging companies on main exchanges.
Final Thoughts
Every IPO represents both opportunity and risk. 3B Films has built a solid foundation in specialized packaging films with clear expansion plans. Whether this translates into shareholder value depends on execution, market conditions, and competitive dynamics.
The packaging industry’s structural growth story remains intact, but individual company success requires continuous innovation, operational excellence, and strategic positioning. 3B Films appears to understand these requirements, but proof lies in future performance rather than IPO presentations.
Disclaimer: This analysis is based on publicly available information and represents market commentary, not investment advice. The author has over 25 years of experience covering financial markets but strongly recommends consulting certified financial advisors and conducting independent research before making investment decisions. Past performance doesn’t guarantee future results, and all investments carry inherent risks including potential loss of principal.