Technichem Organics Limited, a significant player in the specialty chemicals industry, has gone public with its IPO. In this blog we will analyse the company, the objectives of the IPO, financials, sector analysis and IPO details, so that an investor makes an informed decision with investing in the IPO.
Company Overview
Technichem Organics Limited was established in 1996 and is headquartered in Ahmedabad, Gujarat. The company specializes in manufacturing high-performance chemicals. Over the years, the company has been able to develop its niche by catering to diversified industries such as textiles, construction, and water treatment. With robust R&D capabilities and an extensive portfolio of products, the company is looking to build market position through innovation and quality.
Sector Overview
India’s specialty chemicals sector is growing rapidly due to increasing demand from end-user industries and a global shift towards sustainable practices. The CAGR of the sector is around 12%, which indicates its potential. Domestic and export markets contribute significantly to the sector. Technichem’s focus on eco-friendly products puts it in a good position to capitalize on these trends, especially as industries increasingly adopt stringent environmental regulations.
Objectives of the IPO
Technichem Organics intends to utilize the funds raised through the IPO for:
- Increasing the manufacturing capacity and capitalizing on the growing demand.
- Improve its R&D infrastructure to develop new products.
- Repayment or pre-payment of certain borrowings that would reduce financial leverage.
- General corporate expenses to improve operational efficiency.
Financials
Revenue
- FY2024: ₹4,639.11 lakhs
- FY2023: ₹5,035.79 lakhs
- FY2022: ₹6,702.06 lakhs
Profit After Tax (PAT)
- FY2024: ₹472.68 lakhs
- FY2023: ₹172.93 lakhs
- FY2022: ₹342.06 lakhs
EBITDA
- FY2024: ₹952.88 lakhs
- FY2023: ₹435.78 lakhs
- FY2022: ₹547.83 lakhs
Key Financial Ratios
-
EBITDA Margin:
- FY2024: 20.54%
- FY2023: 8.65%
- FY2022: 8.17%
-
PAT Margin:
- FY2024: 10.19%
- FY2023: 3.43%
- FY2022: 5.10%
-
Return on Equity (ROE):
- FY2024: 27.39%
- FY2023: 12.33%
- FY2022: 32.44%
-
Debt-to-Equity Ratio:
- FY2024: 0.90
- FY2023: 1.05
- FY2022: 0.77
Observations Based on Financials and Ratios
- Revenue has shown a declining trend, indicating that the company faces challenges in maintaining growth.
- There has been a significant improvement in EBITDA and PAT margins highlighting better cost control and operational efficiency.
- ROE indicates strong returns to shareholders, with FY2024 as compared to FY2023 showing a significant improvement.
- A decreasing debt-to-equity ratio reflects reduced financial leverage and healthier financial stability.
Risk Factors
- Raw Material Dependence: Fluctuations in raw material prices can impact margins.
- Compliance with Regulations: Compliances with environmental norms may increase operational costs.
- Market Competition: Severe competition from global and domestic players.
- Customer Concentration: Dependence on just a few key customers for significant revenue.
Technichem Organics Limited IPO Details
| IPO Name | Technichem Organics |
| Issue Type | Fresh Issue |
| IPO Open Date | December 31, 2024 |
| IPO Close Date | January 2, 2025 |
| Price Band | ₹52 to ₹55 per share |
| Lot Size | 2000 shares per lot |
| Retail Investors Min lot and Amount | 1 lot & ₹1,10,000 |
| Retail Investors Max lot and Amount | 1 lot & ₹1,10,000 |
| HNI Min lot and Amount | 2 lots & ₹2,20,000 |
| Issue Size | 25.25 crores |
| Basis of Allotment | January 3, 2025 |
| Listing Date | January 7, 2025 |
| Listing Exchange | BSE SME |
| Retail Individual Investors (RII) Quota | 35% |
| Non – Institutional Investors (NII/HNI) Quota | 15% |
| Qualified Institutional Buyers (QIBs) | 50% |
Technichem Organics Limited IPO subscription status
On day 3, January 02, 2025, the IPO has been subscribed 425.08 times. In the retail category, the IPO has been subscribed 329.43 times, in the NII category 1078.89 times, and 101.49 times in the QIB category.
Technichem Organics Limited IPO GMP
As per various sources tracking the IPO, the GMP is ₹15.
Technichem Organics Limited IPO
The registrar for Technichem Organics Limited IPO is Bigshare Services Pvt Ltd. The allotment status can be check on the website of the registrar.
Technichem Organics Limited IPO listing date
The listing date is January 7, 2025.
Conclusion
Technichem Organics’ Limited IPO offers an exciting opportunity to investors to be a part of the growth journey of the specialty chemicals sector. The company, Technichem Organics Limited has strong financials, a focus on innovation, and strategic objectives that make it promising investment. However, potential investors should weigh the risks and evaluate their financial goals before investing.
Happy IPO Investing!
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