Gandhar-Oil-Refinery-India-Limited-ipo-elitewealth

Gandhar Oil Refinery (India) IPO Company Profile:

Gandhar Oil Refinery Limited is a leading manufacturer of white oils by revenue with a growing focus on the consumer and healthcare end industries. As of June 30, 2022, the company’s product suite comprised over 350 products primarily across the PHPO (“personal care, healthcare, and performance oils”), lubricants, and process and insulating oils (“PIO”) divisions under the “Divyol” brand. The products are used as ingredients by leading Indian and global companies for the manufacture of end products for the consumer, healthcare, automotive, industrial, power, and tyre & rubber sectors. The white oil market is the fastest growing segment in the specialty oils sector and Gandhar Oil Refinery Limited is India’s largest manufacturer of white oils by revenue in Financial Year 2022, including domestic and overseas sales of 212, and is one of the top five players globally in terms of market share in the calendar year 2021.

As of June 30, 2022, Gandhar Oil Refinery Limited’s products were sold in over 100 countries across the globe. The company catered to over 3,500 customers in the Financial Year 2022, including leading Indian and global companies such as Procter & Gamble (“P&G”), Unilever, Marico, Dabur, Encube, Patanjali Ayurved, Bajaj Consumer Care, Emami and Amrutanjan Healthcare, supported by its global supplier base and manufacturing operations in India and UAE.

Gandhar Oil Refinery Limited currently operates three manufacturing facilities, with two plants located in Western India and one plant located in Sharjah, UAE, spread across 1,28,454 square meters to cater to Indian and global operations. As of June 30, 2022, the combined annual production capacity of the company’s manufacturing facilities was approximately 497,403 kL, enhanced to 522,403 KL in October 2022.


    Open FREE* Demat & Trading Account & ₹0 AMC for first year


    S.No. Business division Product categories Primary end industries
    1. Personal care, healthcare and

    performance oils (PHPO)

    White oils, waxes, and jellies Consumer; healthcare; plastics; chemical; textiles; and fragrance
    2. Lubricants Automotive oils and industrial oils Automobile; and industrial machines and equipment
    3. Process and insulating oils (PIO) Transformer oils and rubber processing oils Transformer manufacturers; power generation and distribution; and tyre and rubber product manufacturers
    Segment 3M of FY-23(in cr.) % FY-22(in cr.) % FY-21(in cr.) % FY-20(in cr.) % CAGR
    PHO 395.63 50.41% 1479.79 53.50% 771.67 44.64% 695.24 50.97% 28.6%
    Lubricants 218.11 27.79% 594.22 21.48% 473.32 27.38% 330.56 24.23% 21.6%
    PIO 100.19 12.77% 291.64 10.54% 219.16 12.68% 167.75 12.30% 20.2%
    Channel partners 70.86 9.03% 400.54 14.48% 264.59 15.31% 170.49 12.50% 32.9%
    Total 784.79 100.00% 2766.20 100.00% 1728.74 100.00% 1364.04 100.00% 26.6%

    Gandhar Oil Refinery (India) IPO Details:

    IPO Open Date Not Available
    IPO Close Date Not Available
    Listing Date Not Available
    Face Value ₹2 per share
    Price Not Available
    Lot Size Not Available
    Issue Size Not Available
    Fresh Issue [●] shares

    (aggregating up to ₹357 Cr)

    Offer For Sale 12,036,380 shares

    (aggregating up to ₹[●] Cr)

    Issue Type Book Built Issue IPO
    Listing At BSE, NSE
    QIB Shares Offered Not more than 50% of the Offer
    NII (HNI) Shares Offered Not less than 15% of the Offer
    Retail Shares Offered Not less than 35% of the Offer
      Mr. Ramesh Babulal Parekh, Mr. Samir Ramesh Parekh, and Mr. Aslesh Ramesh Parekh

    Gandhar Oil Refinery (India) IPO Financial Analysis:

    Particulars 3M of FY-23(in cr.) FY-22(in cr.) FY-21(in cr.) FY-20(in cr.) CAGR
    Revenue from Operations 883.94 3543.32 2220.80 2503.63 12.3%
    Other Income 1.65 25.48 21.59 13.06  
    Cost of Goods Sold 741.11 3056.16 1933.73 2174.52 12.0%
    Employee Cost 9.08 36.61 23.82 24.23  
    Other expenses 38.78 204.63 124.67 244.64  
    EBITDA 96.62 271.40 160.16 73.30 54.7%
    EBITDA margin% 10.93% 7.66% 7.21% 2.93%  
    Depreciation 4.02 15.10 11.42 10.56  
    Interest 10.08 31.73 35.77 48.84  
    Share of profit/(loss) of a joint venture 0.00 0.00 7.11 -1.00  
    Exceptional items 0.00 0.51 0.00 0.00  
    PBT 82.52 225.08 120.09 12.90 159.4%
    Total tax 17.50 61.65 19.96 3.04  
    PAT 65.02 163.43 100.13 9.86 155.0%
    PAT margin% 7.36% 4.61% 4.51% 0.39%  

    Gandhar Oil Refinery (India) IPO Major Shareholders : 

    S.NO. Name of the Investors No. of Shares % of shareholding
    1 Mr. Ramesh Babulal Parekh 3,01,50,000 37.69%
    2 Ms. Gulab Parekh 1,08,00,000 13.50%
    3 Mr. Kailash Parekh 93,00,000 11.63%
    4 Green Desert Real Estate Brokers 30,00,000 3.75%
    5 Ms. Sunita Parekh 27,00,000 3.38%
    6 IDFC Asset Management Company Limited 22,03,565 2.75%
    7 Mr. Rajiv Parekh 21,25,000 2.66%
    8 Mr. Saurabh Parekh 20,50,000 2.56%
    9 Mr. Kunal Parekh 19,25,000 2.41%
    10 Mr. Aslesh Ramesh Parekh 19,25,000 2.41%
    11 Mr. Samir Ramesh Parekh 19,25,000 2.41%
    12 Ms. Divya Binit Shah 15,50,000 1.94%
    13 Ms. Pooja Shah 15,50,000 1.94%
    14 Ms. Padmini Parekh 15,00,000 1.88%
    15 Denver Bldg. Mat. & Decor TR. LLC 10,00,000 1.25%
    16 Fleet Line Shipping Services LLC 10,00,000 1.25%
      Total 7,47,03,565 93.38%

    Gandhar Oil Refinery (India) IPO Details of the Offer for Sale:

    S. No. Name of the Selling Shareholder Number of Equity Shares

    being offered in the Offer for Sale (Up to)

    1. Mr. Ramesh Babulal Parekh 2,250,000 Equity Shares
    2. Mr. Kailash Parekh 2,250,000 Equity Shares
    3. Ms. Gulab Parekh 2,250,000 Equity Shares
    4. Green Desert Real Estate Brokers 3,000,000 Equity Shares
    5. Green Desert Real Estate Brokers 1,000,000 Equity Shares
    6. Fleet Line Shipping Services LLC 1,000,000 Equity Shares
    7. IDFC First Bank Limited 271,340 Equity Shares
    8. Mr. Amitabh Mishra 1,970 Equity Shares
    9. Mr. Shripad Nagesh Shanbagh 1,970 Equity Shares
    10. Mr. Sunith Menon 1,970 Equity Shares
    11. Mr. Susmit Misra 1,970 Equity Shares
    12. Mr. Vijendra Sumatilal Patani 1,970 Equity Shares
    13. Mr. Vinay Prabhakar Ulpe 1,970 Equity Shares
    14. Mr. Arvind Singh 1,390 Equity Shares
    15. Mr. Mayur Bhupendralal Desai 1,000 Equity Shares
    16. Mr. P. R. Balakrishnan 830 Equity Shares

    Gandhar Oil Refinery (India) IPO Strengths:

    • The global white oil market is oligopolistic with a few players highly active in the market and the top 10 players account for 40-45% of the global white oil market. Gandhar Oil Refinery Limited was India’s largest manufacturer of white oils by revenue in the Financial Year 2022, including domestic and overseas sales, and was one of the top five players globally in terms of market share in the calendar year 2021.

    • Gandhar Oil Refinery Limited catered to an extensive customer base of 3,529 Indian and global companies during the Financial Year 2022. The company’s customers in the PHPO division include P&G, Unilever, Marico, Emami, Bajaj Consumer Care, Encube, Patanjali Ayurved, Dabur, Amrutanjan Healthcare, Supreme Petrochem, and other leading Indian manufacturers of pharmaceutical products. The company manufactures lubricant oils for Gulf Oil, Adani Ports and Special Economic Zone, and other users of industrial machines and equipment. The customers for the PIO division include Toshiba Transmission and Distribution Systems (India) and other leading manufacturers of transformers and power distribution and transmission companies. The company has long-standing relationships with several of its key customers and has been able to maintain high customer loyalty. The percentage of customers placing repeat orders in the quarter that ended June 30, 2022 and Financial Years 2022, 2021, and 2020 was 87.38%, 68.86%, 66.37% and 59.30% respectively.

    • One of Gandhar Oil Refinery Limited’s business strengths lies in its global supplier base which comprises some of the world’s largest global and Indian oil companies. The company procures a majority of its raw material from South Korea and the Gulf Co-operation Council Region (“GCC Region”). The key suppliers in these regions include SK Lubricants, S-Oil, GS Caltex and other global base oil suppliers.

    • Gandhar Oil Refinery Limited is committed to providing high-quality R&D services to meet its customers’ requirements and accordingly aims to continue to strengthen its manufacturing and product development capabilities and collaborate with the customers to meet the growing demand for these specialized end-products.

    • The specialty oil business is capital-intensive in nature and involves inherent complexities in terms of technology, hazard management, and regulations. Scale, size, quality and consistency are crucial factors for manufacturers in the specialty oils industry. Given the nature of the industry as well the stringent quality standards applicable to various products in the end-industries to which the company caters, it is difficult for new entrants to replicate the quality, scale, and business operations.

    • Gandhar Oil Refinery Limited has a track record of consistent financial performance, which positions it for future growth and diversification. The company’s RoE of 39.4% in the Financial Year 2022 was the highest among selected specialty oil and specialty chemical peers according to the CRISIL Report. The capital efficiency has improved, highlighted by the improvement in RoCE from 27.63% in 220 the Financial Year 2020 to 46.99% in the Financial Year 2022 and, according to the CRISIL Report, is the highest among selected specialty oil and specialty chemical peers in the Financial Year 2022.

    Gandhar Oil Refinery (India) IPO Risk Factors:

    • Gandhar Oil Refinery Limited depends significantly on its personal care, health care, and performance oil business division, and downturns in the industries addressed by this business division or an inability to manage sales by the business division effectively leading to any reduction in revenue from this division could adversely affect the business, financial condition, and results of operations.

    • Delays, interruptions, or reductions in the supply of raw materials to manufacture the products and abrupt fluctuations in the prices of the raw materials may adversely affect the business, results of operation, financial condition, and cash flows.

    • Gandhar Oil Refinery Limited’s overall business and the demand for the products is dependent on the end industries in which the products are used and any decline in the demand for the customers’ end products could have an adverse impact on the business, results of operations, cash flows and financial condition

    • Gandhar Oil Refinery Limited does not have long-term agreements with its customers. If a significant number of the customers choose not to place purchase orders with the Company on a regular basis or choose to terminate the contracts, business, financial condition, and results of operations may be adversely affected.

    • Gandhar Oil Refinery Limited relies on Parekh Bulk Carriers, a member of the Promoter Group and other third-party transporters to transport raw materials for the products to the manufacturing facilities and the products to the depots and customers, and any disruption in the transportation arrangements or increases in transportation costs may adversely affect the business, results of operations and financial condition.

    Objects of the Offer:

    Gandhar Oil Refinery Limited proposes to utilize the Net Proceeds from the Fresh Issue towards funding the following objects:

    • Investment in Texol by way of a loan for financing the repayment/pre-payment of a loan facility availed by Texol from the Bank of Baroda

    • Capital expenditure through the purchase of equipment and civil work required for (i) expansion in capacity of automotive oil at the Silvassa Plant; (ii) expansion in capacity of petroleum jelly and accompanying cosmetic product division at the Taloja Plant; and (iii) expansion in capacity of white oils by installing blending tanks at the Taloja Plant

    • Funding working capital requirements of the Company
    • General corporate purposes

    Gandhar Oil Refinery Limited IPO Prospectus:

    Registrar to the offer:

    Link Intime India Private Limited

    Tel: +91 22 4918 6200

    E-mail: gandharoil.ipo@linkintime.co.in

    Investor grievance E-mail: gandharoil.ipo@linkintime.co.in

    Contact person: Shanti Gopalkrishnan

    Website: www.linkintime.co.in

    SEBI Registration: INR000004058