Sigachi Industries
Mainboard₹125 Cr issue
+252.76%
Listing gain over issue price
Issue size
₹125 Cr
1 lot at cut-off
₹14,670
Lot size
90shares
Open
01 Nov 2021
Close
03 Nov 2021
Allotment
10 Nov 2021
Listing
15 Nov 2021
Listing performance
Issue price
₹163
Listed at
₹575
Listing-day close
₹603.75
Latest price
₹25.11
Close on 23 Oct 2026
Listing gain
+252.76%
Return since issue
+54.05%
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 01 Nov 2021 – 03 Nov 2021
- Listing date
- 15 Nov 2021
- Face value
- ₹10 per share
- Issue price
- ₹163 per share
- Lot size
- 90 shares
- Total issue size
- ₹125 Cr
- Market cap at offer price
- ₹501 Cr
- Promoter holding
- 64.64% → 48.46% pre-issue → post-issue
- ISIN
- INE0D0K01022
- Registrar
- Bigshare Services Pvt.Ltd.
- Lead managers
- Unistone Capital Pvt.Ltd.
- Registered office
- 229/1 & 90, Kalyan’s Tulsiram Chambers, Madinaguda, Telangana
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Anchor investor · within QIB | 23,08,500 | — | — |
| Market maker | 0 | — | — |
Application size
Minimum 90 shares per lot, in multiples, at ₹163
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 90 | ₹14,670 |
| Retail (max) | 13 | 1,170 | ₹1,90,710 |
| S-HNI (min) | 14 | 1,260 | ₹2,05,380 |
| S-HNI (max) | 68 | 6,120 | ₹9,97,560 |
| B-HNI (min) | 69 | 6,210 | ₹10,12,230 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Anchor investors
Institutional allocation placed a day before the issue opens, carved out of the QIB portion and locked in after listing.
Shares allocated
23,08,500
Anchor portion
₹37.63 Cr
at ₹163 per share
Valuation and performance
Valuation at offer price
₹163 per share
| Metric | Pre-issue | Post-issue |
|---|---|---|
| Market cap | — | ₹501 Cr |
About Sigachi Industries
Sigachi Industries Limited, incorporated in 1989 originally as Sigachi Chloro-Chemicals Private Limited and converted to a public limited company in 2019, is engaged in the manufacturing and export of microcrystalline cellulose (MCC) of various grades (ranging from 15 microns to 250 microns) and other cellulose-based excipients. The company operates three manufacturing units located at Hyderabad (Unit I), Jhagadia (Unit II), and Dahej (Unit III) in Gujarat, and has a wholly-owned subsidiary, Sigachi U.S. Inc., incorporated in Virginia, USA. For the quarter ended June 30, 2021, approximately 75% of revenues came from the pharmaceutical industry, with the remainder from food, nutraceuticals, and cosmetics sectors. The company also has operations and management agreements with Gujarat Alkalies and Chemicals Limited for contract manufacturing of sodium chlorate, stable bleaching powder, and poly aluminum chloride.
Company Analysis
from RHPSigachi Industries Limited manufactures microcrystalline cellulose (MCC) and related cellulose-based excipients for the pharmaceutical, food, nutraceuticals, and cosmetic industries.
Sigachi Industries Limited, incorporated in 1989 originally as Sigachi Chloro-Chemicals Private Limited and converted to a public limited company in 2019, is engaged in the manufacturing and export of microcrystalline cellulose (MCC) of various grades (ranging from 15 microns to 250 microns) and other cellulose-based excipients. The company operates three manufacturing units located at Hyderabad (Unit I), Jhagadia (Unit II), and Dahej (Unit III) in Gujarat, and has a wholly-owned subsidiary, Sigachi U.S. Inc., incorporated in Virginia, USA. For the quarter ended June 30, 2021, approximately 75% of revenues came from the pharmaceutical industry, with the remainder from food, nutraceuticals, and cosmetics sectors. The company also has operations and management agreements with Gujarat Alkalies and Chemicals Limited for contract manufacturing of sodium chlorate, stable bleaching powder, and poly aluminum chloride.
PharmaceuticalsFood and BeverageNutraceuticalsCosmetics and Personal Care
Objects of the Issue
- Expansion of production capacity for MCC at Dahej, Gujarat ₹2,815.82 lacs p.20
- Expansion of production capacity for MCC at Jhagadia, Gujarat ₹2,924.13 lacs p.20
- Funding capital expenditure to manufacture CCS at the Proposed Unit ₹3,229.87 lacs p.20
- General corporate purposes ₹2,043.03 lacs p.20
- Funding capital expenditure for expansion of production capacity for MCC at Dahej, Gujarat ₹2,815.82 lacs p.94
- Funding capital expenditure for expansion of production capacity for MCC at Jhagadia, Gujarat ₹2,924.13 lacs p.94
- Funding capital expenditure to manufacture CCS at the Proposed Unit at Kurnool, Andhra Pradesh ₹3,229.87 lacs p.94
- General corporate purposes ₹2,043.03 lacs p.94
- Funding capital expenditure for expansion of production capacity for MCC at existing facility at Dahej, Gujarat ₹2,815.82 lacs p.96
- Funding capital expenditure for expansion of production capacity for MCC at existing facility at Jhagadia, Gujarat ₹2,924.13 lacs p.96
- Funding capital expenditure to manufacture CCS at the Proposed Unit ₹3,229.87 lacs p.96
- General corporate purposes ₹2,043.03 lacs p.96
- Expanding the manufacturing capacities of Unit II (Jhagadia) and Unit III (Dahej) p.161
- Setting up of the Proposed Unit p.161
- General corporate purposes
- Not specified in this document section
Issue Structure
- Total Issue
- Up to ₹12,542.85 lacs
- Fresh Issue
- Up to 76,95,000 Equity Shares
- Price Band
- ₹161 to ₹163 per Equity Share
- Lot Size
- 90 Equity Shares (minimum bid lot) and in multiples of 90 thereafter
- Face Value
- ₹10 per Equity Share
Business Model
Sigachi manufactures high-quality cellulose-based excipients primarily MCC, which are used as raw materials in pharmaceutical finished dosages and have applications in food, nutraceuticals, and cosmetic industries. Revenue is generated through direct sales to customers (pharmaceutical companies, merchants, distributors, and exporters) without long-term contracts; the company supplied top five customers for 53.13%, 47.93%, 38.36%, and 41.49% of revenues for Q1 FY2022, FY2021, FY2020, and FY2019 respectively. Export operations constituted 59.44%, 61.18%, 68.15%, and 67.38% of revenues for FY2019, FY2020, FY2021, and Q1 FY2022 respectively.
Business Segments
Supply of MCC as an excipient for finished dosages in pharmaceutical products
Supply of MCC (e.g., HiCel CE 15 grade) as a raw material to provide creamier texture to food products
Supply of cellulose-based excipients for nutraceutical products
Supply of cellulose-based excipients for cosmetic and personal care products
Manufacture of MCC at facilities in Dahej and Jhagadia, Gujarat; used as excipient in pharmaceutical, food and cosmetic industries
Modified cellulose used as excipient; planned manufacturing at proposed unit in Kurnool, Andhra Pradesh
Sales to wholly owned subsidiary Sigachi US, Inc.
MCC is used as an excipient in pharmaceutical tablets, capsules, pellets and sachets; CCS to be used as a superdisintegrant in pharmaceutical formulations
MCC used as emulsifier, stabilizer, anti-caking agent, texture modifier, suspending agent, cold and hot stabilizer in frozen food, ice cream, canned meat, beverages, dairy products, and baked goods
MCC used as abrasive absorbent, emulsion stabilizer, slip modifier and aqueous viscosity increasing agent in bath, hair, eye & facial makeup, skincare and shaving products
Manufacturing and sale of MCC grades, co-processed excipients, and pre-formulated excipients for use as binders, diluents, and functional fillers in pharmaceutical formulations including tablets and capsules
Manufacturing and sale of MCC for use as stabilizer, anti-caking agent, fat substitute and emulsifier in food production
Manufacturing and sale of MCC for use as fat substitute, thickener and binder in cosmetics to ensure consistency in texture, quality and freshness
Manufacturing and sale of MCC grades and pre-formulated excipients for use in nutraceutical formulations
Manufacturing and sale of MCC for export markets to pharmaceutical, food and industrial customers
Manufacturing and sale of MCC for domestic market to pharmaceutical, food and industrial customers
Provision of operational and maintenance services related to company facilities
Manufacturing and sale of MCC, powdered cellulose, and co-processed excipients for pharmaceutical, food, and cosmetic applications
SWOT Analysis
Strengths
- • Leading manufacturer of MCC in India with established brand portfolio(p.19)
- • Diversified product applications across pharmaceutical, food, nutraceuticals and cosmetic industries(p.26)
- • Significant export presence with 68.15% of revenue from exports in FY2021(p.33)
- • Strong revenue growth with 22.24% CAGR between FY2020 and FY2021(p.38)
- • Well-established manufacturing infrastructure with three operational units(p.19)
- • Established market presence in excipient industry(p.44)
- • Experienced leadership with long company tenure(p.49)
- • Strong financial position and revenue growth(p.66)
- • Subsidiary presence in US market(p.46)
- • Over 30 years of experience as leading MCC manufacturer in India(p.156)
- • Pan-India and international market presence with 41 countries served(p.159)
- • Experienced founding management with over 50 years combined cellulose expertise(p.159)
- • R&D accreditation and innovation track record including DSIR approval(p.157)
- • Multiple international quality certifications including EXCiPACT, HACCP, ISO standards(p.160)
- • Long-standing customer relationships with some customers spanning over two decades(p.157)
- • Strong revenue growth with 22.24% CAGR and 26.16% PAT CAGR(p.157)
- • Strategic multi-location manufacturing with export-oriented SEZ facility(p.161)
- • Strong export growth and global presence across 41 countries(p.162)
- • Diversified product portfolio of 59 MCC grades with varied applications(p.163)
- • Strong quality certifications and compliance with international standards(p.162)
- • High capacity utilization rates demonstrating operational efficiency(p.171)
- • Wholly owned US subsidiary facilitating international market access(p.162)
- • Established manufacturing capability with three production facilities across India(p.238)
- • Leading position in high-quality, consistent Microcrystalline Cellulose Powder production(p.238)
- • Strong revenue growth with 38.61% increase in FY2021 over FY2020(p.274)
- • Export-driven business model with 68.94% of FY2021 revenue from exports(p.271)
- • Improved profitability with net profit margin of 15.50% in FY2021(p.271)
- • Focus on manufacturing products with higher profit margins reducing cost of raw materials as percentage of revenue(p.275)
- • Strong profit growth with PAT margin improvement(p.276)
- • Improved production capacity and manufacturing efficiency(p.282)
- • Strong equity growth and deleveraging(p.282)
- • Significant reduction in finance costs through debt repayment(p.275)
Weaknesses
- • High concentration of revenue from top five customers (53.13% in Q1 FY2022)(p.29)
- • Heavy dependence on pharmaceutical industry (75% of revenues)(p.26)
- • Negative cash flow from operations in recent quarter (Q1 FY2022: -₹355.70 lacs)(p.30)
- • Pending litigation from Saffron Capital Advisors with demand of ₹790 lacs(p.31)
- • No long-term contracts with suppliers or customers(p.29)
- • High dependence on few raw material suppliers (top 5 suppliers: 77.92% of FY2019 purchases)(p.26)
- • Trademark assignments to related party (Amit Raj Sinha Family Trust) with potential restrictions(p.32)
- • High dependence on contract labour(p.49)
- • Significant debt obligations with personal guarantees(p.45)
- • Contingent liabilities from tax demands(p.46)
- • Related party transaction concentration(p.46)
- • Restrictive covenants limiting operational flexibility(p.47)
- • Heavy dependence on pharmaceutical sector for 35-40% of MCC market demand(p.143)
- • 83% of plant and machinery for capital expansion yet to be ordered as of October 11, 2021(p.128)
- • Limited domestic sales at 27.12% of total revenue in FY21, over-reliance on exports(p.159)
- • Manufacturing capacity expansion significantly dependent on IPO proceeds(p.96)
- • High concentration of top customers representing 47.93% of FY2021 revenue(p.169)
- • Dependence on government export incentives which have been curtailed(p.161)
- • Limited R&D output with only one patent application filed(p.173)
- • Service tax demand of ₹559.21 lacs with penalty ongoing in appeals process(p.258)
- • Significant borrowings with debt-to-equity ratio of 0.25 as of June 30, 2021(p.266)
- • High dependence on raw material costs (45.30% of revenue in Q1 FY2022)(p.272)
- • Key managerial personnel concentration with founders holding 53.32% of shares(p.220)
- • High dependence on top 5 customers for revenue(p.286)
- • High dependence on top 5 suppliers(p.286)
- • Significant contingent liabilities from service tax demands(p.283)
- • Outstanding dues to creditors and material creditors(p.297)
- • High dependence on working capital financing(p.281)
Opportunities
- • Expansion of manufacturing capacity at existing units and new CCS facility(p.31)
- • Growing global MCC market projected to reach USD 1.4 billion by 2025 at 7.25% CAGR(p.19)
- • Expanding CCS market with projected growth to USD 116.04 million by 2025(p.19)
- • Increased pharmaceutical demand from health crisis and ongoing pandemic(p.26)
- • Opportunity for geographic expansion in domestic and international markets(p.40)
- • Expansion of production capacity at two existing locations(p.94)
- • New product line manufacturing at Kurnool facility(p.94)
- • Increased pharmaceutical demand post-COVID(p.49)
- • Enhanced corporate positioning through listing(p.94)
- • Indian MCC market projected to grow at 13.84% CAGR from 2021-2025, reaching USD 93 million(p.143)
- • Global MCC market forecast to reach USD 1.4 billion by 2025 at 7.25% CAGR(p.141)
- • Asia Pacific MCC market fastest growing region with 7.19% CAGR(p.142)
- • Indian pharmaceutical market expected to grow to USD 64 billion by 2025(p.155)
- • Indian food and beverage market projected to reach USD 516 billion by 2025 at 29.48% CAGR(p.152)
- • Planned capacity expansion of 3,600 MTPA at Dahej and Jhagadia to capture growth(p.113)
- • New CCS product launch at proposed Kurnool unit with 4 MT per day capacity(p.123)
- • Capacity expansion to tap growing MCC demand with 3,600 MTPA and 3,741 MTPA additions(p.161)
- • Focus on core MCC business with potential for diversification and geographic expansion(p.162)
- • Sub-geographic market penetration and product/market diversification potential(p.162)
- • Expansion of global presence through competitive pricing and efficient resource use(p.162)
- • Strengthening marketing network through qualified personnel and customer-centric approach(p.162)
- • Export market expansion with potential growth in international markets(p.271)
- • Capacity expansion through capital work-in-progress of ₹439.89 lacs as of June 30, 2021(p.249)
- • Product diversification and manufacturing of special grades with higher margins(p.274)
- • Domestic market development with domestic sales contributing only 24.73% of FY2021 revenue(p.271)
- • Capacity expansion at multiple facilities underway(p.282)
- • Strong growth in operating profit over 3-year period(p.279)
- • Increased production volumes and operational scale(p.275)
- • Optimization of product mix towards higher margins(p.276)
Threats
- • Dependence on wood pulp imports with supply vulnerabilities(p.26)
- • Risk of disruption from forest depletion affecting raw material availability(p.33)
- • Exposure to regulatory changes in pharmaceutical and excipient industries(p.34)
- • Vulnerability to foreign exchange rate fluctuations (68.15% revenue from exports)(p.33)
- • Risk of loss of export benefits; MEIS scheme withdrawn effective Jan 1, 2021(p.40)
- • Risk of downturn in pharmaceutical industry affecting primary customer base(p.26)
- • Vulnerability to competitive pressure and product substitution(p.25)
- • Pandemic-related supply chain disruptions and lockdown risks(p.26)
- • Intense competitive pressure from larger and international players(p.44)
- • Raw material cost pressures and FX risk(p.50)
- • Regulatory and compliance risk in manufacturing(p.48)
- • Industrial accident and fire hazard risks(p.50)
- • Economic slowdown and reduced customer demand(p.57)
- • COVID-19 operational disruption(p.55)
- • Potential regulatory changes and stricter pharmaceutical manufacturing standards(p.127)
- • COVID-19 pandemic ongoing impact on labor availability, logistics and supply chains(p.158)
- • Global competition from manufacturers in Europe, North America and China(p.144)
- • Commodity price volatility affecting raw material costs particularly wood pulp(p.96)
- • Exchange rate fluctuations impacting export competitiveness with 72.88% revenue from exports(p.96)
- • Risk of machinery cost overruns and delays in project implementation(p.129)
- • Intense competition from organized and unorganized players in domestic and international markets(p.173)
- • Regulatory risks from multiple pharmaceutical and chemical industry regulations(p.178)
- • Environmental compliance and waste management obligations across multiple jurisdictions(p.170)
- • Raw material supply dependence on imported wood pulp from international suppliers(p.166)
- • Exposure to foreign exchange and commodity price volatility(p.166)
- • Withdrawal of MEIS export incentive scheme effective January 1, 2021(p.271)
- • Raw material price volatility with wood pulp being primary raw material(p.272)
- • Global supply chain disruptions and COVID-19 pandemic impacts on operations(p.264)
- • Foreign exchange risk exposure with significant USD-denominated assets and liabilities(p.262)
- • Interest rate risk on floating rate borrowings of ₹2,559.11 lacs as of June 30, 2021(p.262)
- • Dependence on imported raw materials with foreign exchange risk(p.284)
- • Foreign exchange fluctuation risk on export revenues(p.284)
- • Working capital facility constraints(p.285)
- • Interest rate risk on floating rate borrowings(p.284)
- • Credit risk from counterparties(p.285)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| RPS Projects & Developers Private Limited | Corporate Promoter | 32.68% | — |
| Chidambarnathan Shanmuganathan | Promoter | 8.42% | — |
| Rabindra Prasad Sinha | Promoter | 6.60% | — |
| Amit Raj Sinha | Promoter | 5.62% | — |
| RPS Projects and Developers Private Limited | Corporate Promoter | 32.68% | 24.50% |
| Rabindra Prasad Sinha | Promoter/Whole-time Director | 6.60% | 4.95% |
| Chidambarnathan Shanmuganathan | Promoter/Whole-time Director | 8.42% | 6.31% |
| Amit Raj Sinha | Promoter/Managing Director and CEO | 5.62% | 4.21% |
| Rabindra Prasad Sinha | Promoter | — | — |
| Chidambarnathan Shanmuganathan | Promoter | — | — |
| Amit Raj Sinha | Promoter | — | — |
| Rabindra Prasad Sinha | Promoter and Whole-time Director | 6.60% | — |
| Chidambarnathan Shanmuganathan | Promoter and Whole-time Director | 8.42% | — |
| Amit Raj Sinha | Promoter and Managing Director | 5.62% | — |
| Rabindra Prasad Sinha | Promoter / Executive Chairman | 6.60% | — |
| Chidambarnathan Shanmuganathan | Promoter / Executive Vice Chairman | 8.42% | — |
| Amit Raj Sinha | Promoter / Managing Director and Chief Executive Officer | 5.62% | — |
| RPS Projects & Developers Private Limited | Corporate Promoter / Promoter Group | 32.68% | — |
| Amit Raj Sinha | Promoter | — | — |
| RPS Projects and Developers Private Limited | Promoter Group | — | — |
Leadership
Shreya Mitra · Company Secretary and Compliance Officer
Subbarami Reddy Oruganti · Chief Financial Officer
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Sigachi Industries IPO FAQs
What is the lot size of Sigachi Industries IPO?
The minimum lot size of Sigachi Industries IPO is 90 shares. One lot costs ₹14,670 at the cut-off price.
When does Sigachi Industries IPO open and close?
Sigachi Industries IPO opened for subscription on 01 Nov 2021 and closed on 03 Nov 2021.
What is the listing date of Sigachi Industries IPO?
Sigachi Industries IPO listed on 15 Nov 2021.