Tatva Chintan Pharma Chem Ltd IPO details – Date, Price, Size, Allotment Status, Subscription

IPO-Note	Tatva Chintan Pharma Chem Ltd
Rs-1073-Rs1083per Equity share	Recommendation: Subscribe

Company Profile: –

Tatva Chintan Pharma Chem is a specialtychemical manufacturing company engaged in the production of a diverse portfolio of structure directing agents (“SDAs”), phase transfer catalysts (“PTCs”), electrolyte salts for super capacitor batteries and pharmaceutical and agrochemical intermediates and other specialty chemicals (“PASC”). Company is the largest and only commercial manufacturer of SDAs for zeolites in India.SDAs are quarternary salts which are chemicals which helps in the formation of particular channels and pores during the synthesis of zeolites. Zeolites have varied applications including as catalysts and adsorbents.It serves customers across various industries, including the automotive, petroleum, pharmaceutical, agrochemicals, paints and coatings, dyes and pigments, personal care and flavour and fragrances industries. It exports most of its products to over 25 countries, including the USA, China, Germany, Japan, South Africaand the UK

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Issue Details
bjects of the issue	·          Funding capital expenditure requirements for expansion of Dahej Manufacturing Facility ·          Funding capital expenditure requirements for upgradation at R&D facility in Vadodara ·          General corporate purposes
Issue Size	Total issue Size -Rs. 500Cr. Offer for Sale – Rs. 275 Cr. Fresh Issue – Rs. 225 Cr
Face value	Rs.10.00 Per Equity Share
Issue Price	Rs. 1073 – Rs. 1083
Bid Lot	13shares
Listing at	BSE, NSE
Issue Opens:	16thJuly, 2021 – 20th July, 2021
QIB	50% of Net Issue Offer
Retail	35% of Net Issue Offer
NIB	15% of Net Issue Offer

 

 

 

Financial Performance:

Shareholding Pattern:

Shareholding Pattern	Pre- Issue	Post Issue
Promoters & Promoter Group	100.00%	79.17%
Public	–	20.83%

Source: RHP, EWL Research

Strengths:

• Leading manufacturer of structure directing agents and phase transfer catalysts, with consistent quality.
• Global presence with a wide customer base across various industries having high entry barriers
• Diversified specialized product portfolio requiring strong technical know-how
• Modern manufacturing facilities with a focus on ‘green’ chemistry processes

Key Highlights:

• Revenue from operations has grown at a CAGR of 20.7% during FY19-FY21.
• EBITDA Margin Increased from 21.4% in FY20 to 23.8% in FY21.
• SDAs, PTC and Pharmaceutical and agrochemical intermediates and other specialty chemicals (PASC) contributed40%, 27.1% and 30.4% respectively, in total revenue of company in FY21
• Revenue from exports represent 70.58% of total revenue in FY21.
• Current Ratio of the company stood at 1.56 in FY21.
• Debt to Equity Ratio was 0.45 in FY21.
• Raw material cost was 50.2% of the revenue of the company in FY21.

Risk Factors:

• Increase in the cost of raw material could have adverse effect on financials.
• Business risks in multiple countries could adversely affect the company
• Continuing impact of the outbreak of the COVID-19 could have a significant effect on operations of the company

Outlook:

Tatva Chintan Pharma Chem is the only producer of SDAs in India and also enjoys the second largest position globally. Its key customers include Merck, Bayer AG, Asian Paints Ltd., Ipox Chemicals KFT, Laurus Labs Ltd., Tosoh Asia Pte. Ltd., SRF Limited, Navin Fluorine International Limited, Oriental Aromatics Ltd. etc. Global Specialty Chemicals Market values at $798 Billion in 2019 and is expected to grow at a CAGR of 5.3% from 2019-24.The existing customers of the company are largely pharmaceutical and agrochemical companies who are heavily dependent upon supplies from China. Post environmental issue that happened in China and China Plus One policy, countries have been looking for alternatives other than Chinese products. As the world recognizes more of green / clean energy and solutions, the use of SDA’s will increase and improve. At the higher end of the price band of Rs. 1083, the stock is offered at a PE multiple of45.9x on FY21 Post issue EPS of Rs. 23.58which is in line with industry.We would recommend Subscribe to this IPO considering future prospects of the company.

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