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.
Chemcon Speciality Chemicals Issue Details
|Issue Type||Book Built Issue IPO|
|Fresh Issue||[.] Eq Shares of ₹10
(aggregating up to ₹175.00 Cr)
|Offer for Sale||4,300,000 Eq Shares of ₹10
(aggregating up to ₹[.] Cr)
|Face Value||₹10 per equity share|
|IPO Price||[.] to [.] per equity share|
|Min Order Quantity||1 Lot|
|Listing At||BSE, NSE|
|DRHP||For the Draft Red Herring Prospectus or DRHP CLICK HERE.|
About the Company
While doing the Chemcon Speciality Chemicals IPO Review, knowing about the company is necessary. 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.
The company is not only serves the domestic market but also exports its products in the overseas market. The overseas market includes 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.
Summary of Chemcon IPO
Company are a manufacturer of specialised chemicals, such as HMDS and CMIC which are predominantly used in the pharmaceuticals industry (the “Pharmaceutical Chemicals”), and inorganic bromides, namely Calcium Bromide,
Zinc Bromide and Sodium Bromide, which are predominantly used as completion fluids in the oilfields industry
(the “Oilwell Completion Chemicals”).
The key customers of Pharmaceutical Chemicals include Hetero Labs Limited, Laurus Labs Limited, Aurobindo Pharma Limited, Sanjay Chemicals (India) Private Limited, Lantech Pharmaceuticals Limited, Ind- Swift Laboratories Limited, Vivin Drugs & Pharmaceuticals Limited, Macleods Pharmaceuticals Limited and the
key customers of Oilwell Completion Chemicals include Shree Radha Overseas, Water Systems Specialty
Chemical DMCC, Universal Drilling Fluids and CC Gran Limited Liability Company.
The Promoters of this company are KAMALKUMAR RAJENDRA AGGARWAL, NAVDEEP NARESH GOYAL AND SHUBHARANGANA GOYAL. The lead manager to the issue are Intensive Fiscal Services Private Limitedand Ambit Capital Private Limited & the Registrar to this issue is Link Intime India Private Limited.
From FY 2016-17 to FY 2018-19, as per the Restated Financial Statements
For Fiscals 2019, 2018 and 2017, our revenue from operations was Rs.3,041.68 million, Rs.1,583.07 million and Rs.898.92 million, respectively, growing at a CAGR of 83.95% between Fiscal 2017 and Fiscal 2019.
Our EBITDA for Fiscals 2019, 2018 and 2017 was Rs.679.21 million, Rs.456.81 million and Rs.86.60 million respectively, growing at a CAGR of 180.06% between Fiscal 2017 and Fiscal 2019, while our profit after tax for Fiscals 2019, 2018 and 2017 was Rs.430.41 million, Rs.263.81 million and Rs.28.24 million respectively, growing at a CAGR of 290.39% between Fiscal 2017 and Fiscal 2019
Chemcon Limited IPO Date
- Issue Open: September 21, 2020
- Issue Close: September 23, 2020
- Minimum Investment Amount: Rs. 14960/-
- Price Band: Rs. 338/- to Rs. 340/-
- Face Value: Rs. 10/-
- Bid Lot Size: 44 and in multiples of it thereafter
Chemcon IPO Subscription
|Day / Date||QIB||NII||RII||Total Subscription|
|1st Day –|
|2nd Day –|
|3rd Day –|
|4th Day –|
|5th Day –|
|Shares Offered or Net Issue|
The shares subscribed by the public will be updated herein on a daily basis, once the IPO is open for subscription.
Chemcon IPO Allotment Status
Here, you can find the Allotment Status of this IPO.
Chemcon IPO Price Band
The face value of each share is Rs 10, and the price band of the IPO is Rs. 338/- to Rs. 340/-.
Chemcon IPO Equity Share Offering
Issue of [ ] Equity Shares of face value of Rs.10/- each for cash at a price of Rs. [ ] per Equity Share (including a share premium of Rs.[ ] per Equity share) aggregating Rs. [ ] Millions.
Chemcon Limited – Company Overview
Company was originally incorporated as Gujarat Quinone Private Limited at Vadodara, Gujarat, India, as a private limited company under the Companies Act, 1956, pursuant to a certificate of incorporation dated December 15, 1988 issued by the RoC.
Promoters and Promoter Group completed the acquisition of 100% of the Equity Share capital of our Company in 2004 from the shareholders of our Company at the time.
Subsequently, Company was converted into a public limited company pursuant to the approval of Shareholders at an extraordinary general meeting held on November 28, 2018.
Consequently, the name of Company was changed to “Chemcon Speciality Chemicals Limited” and a Fresh certificate of incorporation consequent upon conversion to public limited company was issued by the RoC on April 10, 2019.
Business strategies of Chemcon Limited
- Expansion of our total installed production capacity
- Augmenting growth in the current geographic markets and expanding into new geographic markets
- Exploring newer applications of our existing products as well as focusing on new products that are in synergy
with our current operations
- Continue to strive for cost efficiency
Chemcon Speciality Chemicals Limited – Financial Statements
A quick look into the past financial performance of the company to understand its performance of business and evaluate the growth prospectus:
Financial Summary of Chemcon Speciality Chemicals
On the basis of Standalone statement:-
|Amount (in INR & Millions)|
|Profit After Tax||430.41||263.81||28.24|
Earnings per Equity Share (in Millions)
|Basic & Diluted||2.77||2.70||1.04|
From the above statements, one could find that Chemcon Limited may perform well.
Chemcon IPO – Promoters
The Promoter of this company is:
- KAMALKUMAR RAJENDRA AGGARWAL,
- NAVDEEP NARESH GOYAL AND
- SHUBHARANGANA GOYAL
List of Related Parties (Key Managerial Personnel)
- Shahilkumar Maheshbhai Kapatel, Company Secretary and Compliance Officer
- Rajesh Chimanlal Gandhi, Chief Financial Officer
Interest in promotion of the Company
Promoters are interested in the Company to the extent that they are the Promoters of Company and to the
extent of their respective shareholding in Company, their directorship in Company and the dividends
payable, if any, and any other distributions in respect of their respective shareholding in Company or the
shareholding of their relatives in Company
Promoters do not have any interest in any venture that is involved in any activities similar to those conducted
Interest in Intellectual Rights of the Company
As on the date of filing of the Draft Red Herring Prospectus, the Company does not own any intellectual property rights.
Chemcon Limited IPO Offer Details or Issue Details
|Particulars||No. Of Equity Shares|
|Equity Shares Offered||Up to [●] Equity Shares, aggregating up to Rs[●]
|Reserved for Market Makers||Up to [●] Equity Shares, aggregating up to Rs1,750
|Net Issue to the Public||Up to 4,300,000 Equity Shares, aggregating up to
Rs [●] million
|Retail Investors Portion||Not less than [●] Equity Shares|
|Non-Retail Investors Portion||Not less than [●] Equity Shares|
|Equity Shares outstanding prior to the Issue||31,777,760 Equity Shares|
|Equity Shares outstanding after the Issue||Upto [●] Equity Shares|
Chemcon Limited IPO Issue Object
These are the IPO Issue Objects of the company
- Capital expenditure towards expansion of our Manufacturing Facility (“Project”);
- To meet working capital requirements; and
- General corporate purposes
Chemcon IPO – Basis of the Offer Price
The issue price is determined by the company in consultation with the Lead manager on the basis of the following qualitative and quantitative factors.
Qualitative factors are:
- We are a leading manufacturer globally of the Pharmaceutical Chemicals and we are a leading manufacturer
in India of the Oilwell Completion Chemicals (Source: Frost & Sullivan Report);
- Diversified customer base coupled with long standing relationships;
- The specialty chemicals industry in which we operate has high entry barriers;
- Consistent financial performance with a strong financial position;
- Manufacturing facility with dedicated plants for each of our products; and
- Experienced senior management.
Fundamentally, the company has a moderate to strong fundamental base. After discussing the company profile, it is time to focus on the competitive strength.
• 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.
KamalKumar Rajendra Aggarwal, Navdeep Naresh Goyal, and Shubharangana Goyal are the promoters of the company.
Objects of the Issue:
Firm purposes to utilize the net proceeds from the IPO towards the below objectives. From these objectives, you will get a clear idea of the reason for issuing the shares.
• To meet capital expenditures for expansion of manufacturing facility: One of the important purposes is to meet the capital expenditure for the expansion of the manufacturing facility.
• To meet business working capital requirements: The second most important object of the issue is to meet business working capital requirements.
• And to meet general corporate purposes: And the third important purpose is to meet the general corporate purposes.
Here, is the details of company financials.
|Particulars||For the year/period ended (₹ in million)|
|Profit After Tax||430.41||263.81||28.24|
Chemcon Speciality Chemicals IPO Review
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.