Incorporated in 1988, Chemcon Speciality Chemicals Ltd is a manufacturer of specialized chemical products i.e. HMDS and CMIC. Its product portfolio includes oilfield chemicals (Calcium Bromide, Sodium Bromide, and Zinc Bromide), Pharma intermediates, Silanes, and chemical contract manufacturing work. The article is about Chemcon Speciality Chemicals IPO Review.
About the Company
Chemcon Chemicals is a leading manufacturer of Pharmaceutical chemicals and generates maximum revenue from this particular segment. Hetero Labs Limited, Laurus Labs Ltd, Aurobindo Pharma Ltd, Lantech Pharmaceuticals Ltd, Macleods Pharma Ltd are the key customers of its Pharma chemical business. However, Shree Radha Overseas, Universal Drilling Fluids, Water Systems Speciality are some of the clients of its oilfield chemicals segment. In 2018, it was the 8th largest manufacturer of HMDS and 2nd largest manufacturer of CMIC chemical worldwide.
Company not only serves the domestic market but also export its products in overseas market such as USA, China, Japan, UAE, Serbia, Russia, Malaysia, and Azerbaijan. It has a manufacturing plant at Manjusar near Vadodara in Gujarat, 5 operational plants, 3 warehouses, and 2 leased warehouses.
Competitive strengths
• Largest manufacturer of pharmaceutical chemicals across the globe.
• Leading oilfield chemicals manufacturer in India.
• Diversified clientele base in the domestic and global markets.
• Strong and consistent financial performance.
• Dedicated manufacturing plants for each product.
Company Promoters:
KamalKumar Rajendra Aggarwal, Navdeep Naresh Goyal, and Shubharangana Goyal are the promoters of the company.
Company Financials:
| Particulars | For the year/period ended (₹ in million) | |||
|---|---|---|---|---|
| 31-Mar-20 | 31-Mar-19 | 31-Mar-18 | 31-Mar-17 | |
| Total Assets | 2,257.92 | 1,730.33 | 970.66 | 626.80 |
| Total Revenue | 2,660.17 | 3,053.26 | 1,583.91 | 899.96 |
| Profit After Tax | 488.53 | 430.41 | 263.81 | 28.24 |
Objects of the Issue:
Firm purposes to utilize the net proceeds from the IPO towards below objectives;
• To meet capital expenditures for expansion of manufacturing facility.
• To meet business working capital requirements.
• To meet general corporate purposes.
Chemcon IPO Details
| IPO Date | Sep 21, 2020 – Sep 23, 2020 |
| Issue Type | Book Built Issue IPO |
| Issue Size | 9,352,940 Eq Shares of ₹10 (aggregating up to ₹318.00 Cr) |
| Fresh Issue | 4,852,940 Eq Shares of ₹10 (aggregating up to ₹165.00 Cr) |
| Offer for Sale | 4,500,000 Eq Shares of ₹10 (aggregating up to ₹153.00 Cr) |
| Face Value | ₹10 per equity share |
| IPO Price | ₹338 to ₹340 per equity share |
| Market Lot | 44 Shares |
| Min Order Quantity | 44 Shares |
| Listing At | BSE, NSE |
Chemcon IPO Tentative Date / Timetable
| Bid/Offer Opens On | Sep 21, 2020 |
| Bid/Offer Closes On | Sep 23, 2020 |
| Finalisation of Basis of Allotment | Sep 28, 2020 |
| Initiation of Refunds | Sep 29, 2020 |
| Credit of Shares to Demat Acct | Sep 30, 2020 |
| IPO Shares Listing Date | Oct 1, 2020 |
Chemcon IPO Lot Size and Price (Retail)
| Application | Lots | Shares | Amount (Cut-off) |
|---|---|---|---|
| Minimum | 1 | 44 | ₹14,960 |
| Maximum | 13 | 572 | ₹194,480 |
Chemcon IPO Promoter Holding
| Pre Issue Share Holding | 100% |
| Post Issue Share Holding | 74.47% |
Chemcon IPO Offer Size by Investor Category
The Percentage of Offer Size available for Allotment/allocation:
- QIBs: 50%
- Non-Institutional Investors: 15%
- Retail Individual Investors: 35%
Now, come to review. As you can see in the company financials. Here, the previous 3 years’ financial is given. As per the report, the total asset was 626.80 (FY17), 970.66(FY18), 1,730.33(FY19). Total revenue was 899.96 (FY17), 1,584.72(FY18), and 3,043.16(FY19). Lastly, profit after taxes is 28.24 (FY17), 263.81(FY18), 430.41(FY19). The profit level is moderate to high. Now, from recommendations of different brokers and financial houses, we have checked with 8 of them. We have found that 5 of them asked to SUBSCRIBE and 3 of them maintained a NEUTRAL rating. Hence while doing the Chemcon Speciality Chemicals IPO Review, based on the above data and the company financials, we also maintain a SUBSCRIBE rating on the issue. But make sure you check the IPO at the final day of applying with our special checking method.