3B Films share price freezes at 5% lower circuit post stock market debut

Mumbai, June 6, 2025 — Shares of 3B Films Ltd. made a disappointing debut on the Indian stock exchanges on Thursday, locking into a 5% lower circuit immediately after listing. The company, which recently concluded its SME IPO, witnessed a weak start as broader indices remained buoyant, underscoring investor caution and valuation concerns.

Muted Debut Despite Market Optimism

3B Films, a manufacturer of Biaxially Oriented Polypropylene (BOPP) films used in packaging, listed on the NSE Emerge platform at ₹128 per share, the same as its issue price. However, selling pressure soon emerged, dragging the stock to ₹121.60 — its lower circuit limit for the day — within minutes of trading.

The broader market, meanwhile, continued to trend positively with the Nifty 50 closing above the 24,700 mark, indicating that the weakness in 3B Films’ debut was more stock-specific than market-driven.

IPO Subscription and Valuation Concerns

3B Films’ IPO was open between May 30 and June 3 and was subscribed 1.92 times, a relatively modest response compared to recent SME listings. The issue aimed to raise approximately ₹43 crore, primarily to fund working capital requirements and general corporate purposes.

Market analysts believe the valuation at which the company came to the market was on the higher side compared to its listed peers in the packaging industry. This could have dampened investor enthusiasm, especially in a competitive sector where margin pressures and raw material volatility are ongoing concerns.

“The fundamentals of 3B Films are decent, but the IPO was priced aggressively. Investors likely chose to stay cautious, particularly in the SME segment, where risk perception is higher,” said Ajay Singh, Head of Research at Finwise Securities.

Company Overview and Financials

3B Films, based in Gujarat, specializes in manufacturing BOPP films which are primarily used in food, pharmaceutical, and industrial packaging. It has a production facility with a 10,000-tonne capacity and serves both domestic and international clients.

According to its red herring prospectus, the company reported a net profit of ₹4.2 crore in FY24 on revenues of ₹108 crore, showing year-on-year growth but moderate margins. Analysts noted that the thin profit margins could be a red flag for long-term investors.

Investor Sentiment Post-Listing

Investor sentiment towards SME IPOs has been increasingly selective, especially after the volatility seen in certain recent listings. While several SME stocks have delivered multi-bagger returns post-listing, others have struggled to sustain gains, leading to greater caution.

“The listing at par and immediate move to the lower circuit suggests there wasn’t enough institutional or retail demand post-IPO,” said Neha Tripathi, a market strategist at EquityMint Advisors. “This could either be a case of poor price discovery or a signal that investors want to wait for earnings visibility before entering.”

Retail investors, who form a major chunk of SME IPO subscribers, were also seen booking early profits or refraining from fresh buying, contributing to the quick hit on the lower circuit.

Outlook for 3B Films

Despite the weak debut, analysts believe the company’s long-term prospects depend on how effectively it manages raw material costs and scales its exports. The flexible packaging industry is poised for steady growth driven by demand from FMCG and pharma sectors.

“If 3B Films can improve margins and demonstrate sustained revenue growth, it may attract interest from value investors in the medium term,” added Singh of Finwise Securities.

However, until the company delivers consistent quarterly results and shows traction in operational efficiency, analysts advise investors to adopt a wait-and-watch approach.

The debut of 3B Films on the stock market reflects the changing dynamics of investor appetite for SME offerings. With quality becoming a major factor in stock selection, even a profitable company with solid operations can face a lukewarm response if pricing and timing are not aligned with market sentiment.

As the stock remains at its lower circuit, all eyes will be on the company’s performance in the upcoming quarters. Investors and analysts alike will closely monitor how the management navigates a competitive market to create long-term shareholder value.