Polymatech Unlisted Shares — A Leader In Growing Semiconductor Space
Polymatech Electronics Limited (PEL), a leading Indian manufacturer of semiconductor technology for LED chips and opto-semiconductors. Founded in the year 2007 as a sub and subsidiary company of a Japanese Polymatech Company Ltd, in 2018 the company was bought over by Chennai based entrepreneurs Mr. Eswara Rao Nandam and Mrs. Uma Nandam. Polymatech has set up its production facility at SIPCOT Hi-Tech SEZ, Oragadam, Tamil Nadu, aiming to carve a niche for itself as a major global player in elastomer parts and semiconductor chip manufacturing.
Historical Ownership & The Buy Incorporation
Polymatech was co-owned by Polyma Asset Management Company (Japan) and Polymatech (Malaysia) prior to the acquisition with ownership percentages of 52.2% and 47.8%, respectively. After its initial focus on manufacturing keypads for mobile phones, the company struggled financially in the years after 2011 due to declining demand. The change in ownership in 2018 made starting over possible and guided the company in the direction of semiconductor chip manufacturing.
Transition in Strategy & Transformation of Businesses
Under new management, Polymatech began making semiconductor chips for LEDs and luminaires. What the company is currently building:
- Opto Semiconductors – High power lighting systems
- ICs & Logic Chips – Improvement of electronic circuit efficiencies
- LED Disinfectants – Built for hospital-grade disinfection
As a result, Polymatech has become an enabler in the semiconductor sector, from its pivot.
Statements & Growth of Well-Being
Since its acquisition, Polymatech has achieved strong financial growth:
- FY20 – Revenue: ₹2 Crore | Loss: ₹27 Lakh
- FY21– Revenue: ₹45Cr | Profit (PAT): ₹7Cr
- FY22 – Revenue: ₹126 Cr | Profit (PAT): ₹34 Cr
Despite this, the company is on a consistent upward trend, increasing operations and results.
Upcoming Projects & Production Capacity
Polymatech appears to have a massive capacity expansion under way, going from 300 million chips/year to what looks to be 20 billion chips/year by 2024. Expansion will require a total investment of around $1 billion.
Some of the major semiconductor products include:
- Microcontrollers
- Wireless Chips
- Logic Chips
- Memory Chips
- LED Chips
This expansion will give Polymatech a more prominent position in the global semiconductor narrative.
Holdings & Market Assessment
By March 31, 2022, Mr. Eswara Rao Nandam and Mrs. Uma Nandam were the primary shareholders of the company. The unlisted market share price is ₹400 per share, or a company valuation of ₹2,540 Crore assuming 6.35 Crore outstanding shares.
- EPS (FY22) – ₹5.35
- P/E Ratio – 74x
Besides, there have been new investors coming in the company during FY22-23, which is also likely to back its valuation according to media reports.
Leadership & Management
Japanese tech experts sit at our helm as Chief Technology Officers(CTOs) and board members, giving us the advantage in leadership. Under the strategic guidance of Mr. Eswara Rao Nandam and Mrs. Uma Nandam the company has become a high-growth semiconductor company.
Future Growth Potential
Polymatech is ready for strong growth, as demand for LED semiconductor chips spike in lighting, sanitization, and industrial applications. Key drivers of the continued success of the company will be its emphasis on technological innovation, advanced R&D, and large-scale manufacturing.
Conclusion
Since being acquired in 2018, Polymatech Electronics Limited has made a stunning turnaround. Back then, though, the company was fighting for its survival, facing financial troubles on multiple fronts: delays in finding investment, increasing competition from rivals and a growing lack of demand for Indian semiconductors. Since then, the company has grown from a struggling start-up to a burgeoning powerhouse in India’s semiconductor ecosystem. We believe that Polymatech’s business and economic fundamentals make it a compelling investment in the unlisted market with good value and long-term potential for high growth.
