BLS Polymers sets Rs 89.50 crore as FY28 need reaches Rs 224.08 crore

BLS Polymers proposes to use Rs 89.50 crore of net IPO proceeds for working capital in fiscals 2027 and 2028. Its estimated net working capital requirement is Rs 224.08 crore for fiscal 2028, compared with Rs 182.90 crore for fiscal 2027, as projected current assets increase faster than current liabilities.

How will BLS Polymers use Rs 89.50 crore of IPO proceeds?

BLS Polymers plans to deploy Rs 89.50 crore of net proceeds for working capital, comprising Rs 39 crore in fiscal 2027 and Rs 50.50 crore in fiscal 2028. The funding is intended for business operations and executing future orders, while any requirement beyond the stated IPO allocation is proposed to be funded through internal accruals, borrowings or both.

Working capital is the excess of current assets over current liabilities, covering operating items such as inventory, customer receivables, supplier advances and payables rather than fixed assets. BLS Polymers' board approved the estimated working-capital requirements and proposed funding on September 24, 2026, and the statutory auditor confirmed the estimates in its report of the same date.

The allocation is also linked to BLS Polymers' international sales strategy. Export revenue was Rs 5.70 crore, or 5.32% of revenue from operations, in the three months ended June 30, 2026, compared with Rs 19.08 crore, or 5.46%, in fiscal 2026; Rs 27.68 crore, or 8.43%, in fiscal 2025; and Rs 11.95 crore, or 4.03%, in fiscal 2024.

BLS Polymers has entered into a service agreement with a United Arab Emirates-based marketing and distribution company for advisory and support services in Egypt, the United Arab Emirates, Saudi Arabia, Bahrain, Kuwait, Oman and Qatar. If orders materialise under that arrangement, the company says it may require additional funding for raw materials, finished goods, trade receivables and delivery timelines, meaning the need depends partly on future order volumes.

Why is BLS Polymers' FY28 working capital need Rs 224.08 crore?

BLS Polymers estimates that its fiscal 2028 net working capital requirement will reach Rs 224.08 crore because current assets are projected at Rs 316.89 crore while current liabilities are projected at Rs 92.81 crore. That requirement is Rs 41.18 crore above the Rs 182.90 crore estimated for fiscal 2027.

The increase is driven by a projected Rs 48.89 crore rise in current assets between fiscal 2027 and fiscal 2028, partly offset by a Rs 7.71 crore rise in current liabilities. The following figures are management estimates confirmed by the statutory auditor, rather than reported future financial results.

BLS Polymers' audited standalone net working capital was Rs 135.75 crore for the three months ended June 30, 2026, compared with Rs 116.98 crore for fiscal 2026, Rs 119.75 crore for fiscal 2025 and Rs 118.33 crore for fiscal 2024. The June 2026 position reflected current assets of Rs 197.45 crore and current liabilities of Rs 61.70 crore.

The funding plan requires sources beyond the issue proceeds to remain available. For fiscal 2028, BLS Polymers estimates Rs 88.58 crore from internal accruals and Rs 85 crore from borrowings, alongside Rs 50.50 crore of IPO proceeds; in fiscal 2027, the corresponding amounts are Rs 68.90 crore, Rs 75 crore and Rs 39 crore.

Which items account for BLS Polymers' projected FY28 requirement?

Inventory and trade receivables are the largest components of BLS Polymers' fiscal 2028 current-asset estimate. Inventory is projected at Rs 121.26 crore and trade receivables at Rs 134.50 crore, aggregating to Rs 255.76 crore, or about 81% of estimated current assets of Rs 316.89 crore.

Inventory is projected to increase by Rs 21.26 crore from Rs 100 crore in fiscal 2027, while trade receivables are estimated to rise by Rs 6.50 crore from Rs 128 crore. Other financial assets are projected to increase from Rs 20 crore to Rs 34.64 crore, and other current assets from Rs 20 crore to Rs 26.49 crore.

BLS Polymers attributes other financial and current assets mainly to discount receivables and supplier advances under memoranda of understanding, or MOUs, for material purchases. The company says such arrangements can support procurement of substantial material quantities amid polymer-price volatility and enable discounts, but they also require funds to be committed before material is lifted.

On the liability side, trade payables are estimated at Rs 79.47 crore in fiscal 2028, up from Rs 72 crore in fiscal 2027. Other financial liabilities, other current and lease liabilities, and provisions are projected at Rs 1.29 crore, Rs 3.90 crore and Rs 8.15 crore, respectively, taking total projected current liabilities to Rs 92.81 crore.

What operating assumptions must hold for the plan to persist?

BLS Polymers assumes inventory holding of 63 days in fiscal 2027 and 65 days in fiscal 2028. Those assumptions compare with 62 days on an annualised basis for the three months ended June 30, 2026, 66 days in fiscal 2026, 65 days in fiscal 2025 and 78 days in fiscal 2024.

The company links its inventory assumptions to customer demand, raw-material procurement cycles, production planning and the need to meet delivery schedules. The fiscal 2028 inventory estimate therefore requires procurement and production patterns to remain consistent with the projected 65-day holding period despite the stated volatility in polymer prices.

Trade receivable days are assumed at 73 days in fiscal 2027 and 77 days in fiscal 2028, compared with 72 annualised days for the June 2026 period and 76 days in each of fiscals 2026 and 2025. BLS Polymers says payment terms for certain wire and cable customers extend from 60 to 90 days and, for some customers, beyond 90 days; new pipe-coating customers are also part of its market-development strategy.

Trade payable days are projected at 55 days in both fiscal 2027 and fiscal 2028, compared with 73 annualised days for the June 2026 period and 50 days in fiscal 2026. BLS Polymers says timely procurement of polymers, additives and chemicals is necessary for continuous production, so the projection depends on maintaining supplier relationships and material availability while managing payment timing.

BLS Polymers has appointed Crisil Ratings Limited to monitor use of gross proceeds because the fresh issue exceeds Rs 100 crore, as required under Regulation 41 of the Securities and Exchange Board of India Issue of Capital and Disclosure Requirements Regulations. The monitoring agency and audit committee are to review utilisation quarterly until the net proceeds are fully used, and a material deviation from the objects requires shareholder approval by special resolution.

Conclusion

BLS Polymers' Rs 89.50 crore working-capital allocation supports a projected increase in net working capital from Rs 182.90 crore in fiscal 2027 to Rs 224.08 crore in fiscal 2028. The estimate is concentrated in inventory and trade receivables, while internal accruals and borrowings are expected to fund Rs 173.58 crore of the fiscal 2028 requirement.

The disclosed milestones are deployment of Rs 39 crore in fiscal 2027 and Rs 50.50 crore in fiscal 2028, together with quarterly monitoring of gross-proceeds utilisation. The unresolved factor is whether orders emerge from the United Arab Emirates distribution arrangement, since BLS Polymers has stated that materialised export orders may require incremental investment in inventory and receivables.