Technichem Organics
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 31 Dec 2024 – 02 Jan 2025
- Listing date
- 07 Jan 2025
- Face value
- ₹1 per share
- Issue price
- ₹55 per share
- Lot size
- 2,000 shares
- Issue type
- Book Building issue
- Listing at
- BSE
- Total issue size
- ₹25.25 Cr
- Market cap at offer price
- ₹95.27 Cr
- Promoter holding
- 97.64% → 71.77% pre-issue → post-issue
- ISIN
- INE0ZHT01012
- Registrar
- Bigshare Services Pvt.Ltd.
- Lead managers
- Shreni Shares Ltd.
- Registered office
- 5th Floor, Malak Complex, Behind Old Gujarat High Court, Navrangpura, Gujarat
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 | 12,98,000 | — | — |
| Market maker | 2,52,000 | — | — |
Application size
Minimum 2,000 shares per lot, in multiples, at ₹55
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 2,000 | ₹1,10,000 |
| S-HNI (min) | 2 | 4,000 | ₹2,20,000 |
| S-HNI (max) | 9 | 18,000 | ₹9,90,000 |
| B-HNI (min) | 10 | 20,000 | ₹11,00,000 |
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.
Valuation and performance
Valuation at offer price
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | 3.71 | 2.73 |
| P/E (×) | 14.82 | 20.15 |
| Price to book (×) | 3.57 | — |
| Market cap | — | ₹95.27 Cr |
Key performance indicators
- Return on net worth
- 24.09%
- ROCE
- 22.57%
- Debt / equity
- 0.90
- PAT margin
- 10.19%
- NAV per share
- ₹15.41
- Price to book
- 3.57
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Technichem Organics
Technichem Organics Limited, incorporated on February 27, 1996, and converted to public limited status on July 4, 2024, is a specialty chemicals manufacturer based in Ahmedabad, Gujarat. The company operates three manufacturing plants in Khambhat, Anand district, producing a wide range of chemicals including pyrazoles, pyrazolones, specialty chemicals, pigment and dye intermediates, and air oxidation chemistry products. The company serves multiple end-use industries including pharmaceuticals, high-performance pigments and specialty chemicals, specialty chemicals, and coatings. Its business model comprises manufacturing of its own specialty chemicals and intermediates (83.48% of revenue as of June 30, 2024), custom manufacturing, and contract/exclusive manufacturing. The company has a significant export presence, contributing 45.03% of total revenue as of June 30, 2024.
Company Analysis
from RHPTechnichem Organics Limited manufactures specialty chemicals, pyrazoles, pyrazolones, pigment and dye intermediates, and air oxidation chemistry serving pharma, high-performance pigments, specialty chemicals, and coating industries.
Technichem Organics Limited, incorporated on February 27, 1996, and converted to public limited status on July 4, 2024, is a specialty chemicals manufacturer based in Ahmedabad, Gujarat. The company operates three manufacturing plants in Khambhat, Anand district, producing a wide range of chemicals including pyrazoles, pyrazolones, specialty chemicals, pigment and dye intermediates, and air oxidation chemistry products. The company serves multiple end-use industries including pharmaceuticals, high-performance pigments and specialty chemicals, specialty chemicals, and coatings. Its business model comprises manufacturing of its own specialty chemicals and intermediates (83.48% of revenue as of June 30, 2024), custom manufacturing, and contract/exclusive manufacturing. The company has a significant export presence, contributing 45.03% of total revenue as of June 30, 2024.
Objects of the Issue
- Funding of capital expenditure requirements of our Company towards setting up of a new plant named as 'Plant –4' ₹703.82 Lakhs p.27
- Repayment or prepayment, in full or in part, of certain borrowings availed by our Company from banks, financial institutions and non-banking financial companies ₹1,023.51 Lakhs p.27
- General corporate purposes p.27
- Funding of capital expenditure requirements of our Company towards setting up of a new plant named as 'Plant –4' ₹703.82 lakhs p.90
- Repayment or prepayment, in full or in part, of certain borrowings availed by our Company from banks, financial institutions and non-banking financial companies ₹1,023.51 lakhs p.90
- General corporate purposes p.90
- Funding capex for construction of factory building (Plant-4) and purchase of plant and machinery for expansion and upgradation at the existing manufacturing facility 502.44 lakhs p.95
- Repayment of borrowings availed by the Company from banks, financial institutions and non-banking financial companies 1,023.51 lakhs p.98
- General corporate purposes p.101
Issue Structure
- Total Issue
- Up to 45,90,000 Equity Shares aggregating up to [●] Lakhs
- Fresh Issue
- Up to 45,90,000 Equity Shares of Face Value of ₹10/- each for cash at a price of ₹ [●] per Equity Share including a share premium of ₹ [●] per Equity Share aggregating to ₹ [●] Lakhs
- Offer for Sale
- Not Applicable as the entire issue constitutes fresh issue of equity shares
- Price Band
- Price Band to be decided by our Company in consultation with the Book Running Lead Manager
- Lot Size
- [●] Equity Shares and in multiples of [●] Equity Shares thereafter
- Face Value
- ₹10/- each
Business Model
The company earns revenue through three business models: (1) manufacturing and sale of its own specialty chemicals and intermediates (83.48% of FY 2024-25 revenue to June 30, 2024), (2) custom manufacturing services for customers, and (3) contract and exclusive manufacturing arrangements. Revenue is generated from domestic sales in Gujarat (63.54%), Maharashtra (24.15%), Haryana (9.22%), and Telangana (3.09%), as well as from exports (45.03% of total revenue).
Business Segments
SWOT Analysis
- • Diversified product portfolio across multiple industries(p.27)
- • Established presence in high-value specialty chemicals segment(p.38)
- • Significant export presence generating substantial revenue(p.38)
- • Established manufacturing operations with multiple production plants(p.92)
- • Capacity expansion strategy aligned with industry growth(p.92)
- • Multi-product capability across pharma, agrochemical, coating, pigment, dye industries(p.133)
- • Integrated manufacturing facility with in-house R&D, pilot plant, and quality control(p.135)
- • Strong R&D capabilities enabling process optimization and complex chemistry development(p.135)
- • ISO certifications for quality and environmental management systems(p.133)
- • Diversified customer base across 11 countries and 9 Indian states reducing concentration risk(p.136)
- • Established presence since 1996 with capacity of 9,50,000 kg per annum(p.133)
- • Backward integration enables operational efficiency and cost reduction(p.154)
- • Diverse product portfolio and specialization reduce market concentration risk(p.154)
- • Experienced workforce with blend of seasoned professionals and young talent(p.155)
- • Strong management team and no history of labor unrest(p.155)
- • ISO certifications demonstrate quality and environmental management capability(p.166)
- • Extreme dependence on small customer base for revenues(p.33)
- • No long-term contracts with customers, exposure to order volatility(p.33)
- • Dependent on few raw material suppliers without long-term agreements(p.34)
- • Top 10 suppliers represent over half of raw material purchases(p.34)
- • Lack of patent protection for manufacturing processes(p.35)
- • Outstanding litigation with tax authorities(p.34)
- • History of delayed regulatory filings and compliance failures(p.42)
- • Negative cash flows from operations and financing activities(p.35)
- • Significant unsecured loans recalled on demand(p.41)
- • Highly concentrated manufacturing footprint in single region(p.39)
- • Hazardous materials handling poses operational and liability risks(p.47)
- • Delayed statutory filings and deposit of dues(p.51)
- • Missing corporate records and regulatory filings prior to 2006(p.51)
- • Dependent on promoters for operations and decision-making(p.55)
- • No alternate financing arrangements for capital requirements(p.48)
- • Debt financing with restrictive covenants(p.52)
- • Promoters personally guarantee company loans(p.52)
- • High customer concentration with top 10 customers representing 68.83% of revenue as of June 30, 2024(p.136)
- • Revenue decline from ₹6,702 lakhs (FY 2021-22) to ₹4,639 lakhs (FY 2023-24)(p.134)
- • Moderate to high debt-to-equity ratio of 0.90 as of March 31, 2024(p.134)
- • Production facilities heavily concentrated at single location (Khambhat, Gujarat)(p.133)
- • Capacity utilization at only 60% in FY 2023-24 indicating underutilization(p.149)
- • High and rising employee attrition rate over three years(p.155)
- • Significant dependence on borrowings with substantial debt obligations(p.168)
- • Limited export obligation and export market establishment(p.155)
- • No formal dividend policy despite being a public company(p.190)
- • Expansion into new markets and geographical regions(p.37)
- • Shift from high-volume low-value to low-volume high-value business model(p.46)
- • Capital expenditure for new manufacturing plant(p.28)
- • India's strong position in global chemicals industry(p.27)
- • Expansion into high-value specialty chemicals(p.93)
- • New product portfolio diversification(p.93)
- • Forward integration to improve margins and supply chain control(p.93)
- • Ready market through existing customer relationships(p.93)
- • Significant growth potential in Indian chemical sector(p.92)
- • Expansion of manufacturing capacity through Plant-4 with 445 tons per annum capacity expected to commence commercial production by Q3 FY 2025-26(p.97)
- • Shift to high-value air oxidation chemistry producing specialty benzoic acids with higher margins(p.137)
- • Growing Indian specialty chemicals market projected at CAGR of 11-12% by 2027(p.129)
- • Expansion of geographical presence in existing and new international markets(p.137)
- • Government support through PLI schemes and incentives for specialty chemicals manufacturing(p.131)
- • Expansion of product offerings through specialty chemicals and air oxidation chemistry(p.154)
- • Recent introduction of air oxidation chemistry to increase product range(p.166)
- • Capacity expansion achieved through land acquisition and facility development(p.166)
- • Export house status and international market presence already established(p.166)
- • Raw material price volatility and supply disruptions(p.34)
- • International trade risks and export market volatility(p.39)
- • Exposure to foreign currency exchange rate fluctuations(p.39)
- • Industry cyclicality and demand volatility(p.38)
- • Regulatory changes and compliance risks(p.25)
- • Manufacturing operation risks from natural disasters and disruptions(p.35)
- • Competitive pressure and risk of product commoditization(p.35)
- • Labour disputes and operational disruptions(p.36)
- • Capacity utilization risks and under-utilization penalties(p.38)
- • Competition from low-cost Chinese manufacturers(p.48)
- • Poor infrastructure impacts procurement and logistics(p.48)
- • Stricter environmental and health regulations(p.50)
- • Dependence on third-party transportation with rising costs(p.49)
- • Power supply disruptions affecting production(p.50)
- • Demand dependency on customer product success(p.48)
- • Plant-4 implementation delays and cost overruns(p.48)
- • Regulatory approval uncertainties for Plant-4(p.48)
- • Inventory management risks impacting profitability(p.49)
- • Industrial accident risks in hazardous operations(p.49)
- • Inflation impact on production costs(p.61)
- • Volatility in raw material prices impacting cost of production and margins(p.149)
- • Heavy dependence on imports of raw materials from China, Japan and Germany creating supply and currency risk(p.149)
- • Significant export concentration to China representing 42.92% of export revenue as of June 30, 2024(p.141)
- • Competition from global manufacturers and supply chain disruptions in specialty chemicals sector(p.132)
- • Environmental and regulatory compliance requirements including pollution control and hazardous waste management(p.152)
- • Dependence on continuous power supply with only backup DG sets for contingency(p.152)
- • Intense competition from domestic and international players in chemical industry(p.154)
- • Subject to extensive environmental, health and safety regulations(p.154)
- • Regulatory compliance burden related to hazardous chemical handling(p.159)
- • Dependence on overseas suppliers for raw materials and foreign exchange exposure(p.154)
- • Risk of insurance claims not being honored fully or on time(p.155)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Mr. Bharat Jayantilal Pandya | Promoter | 48.95% | — |
| Mr. Pandya Anilkumar Jayantilal | Promoter | 43.91% | — |
| Ms. Alpa Bharat Pandya | Promoter Group | 1.84% | — |
| Ms. Shailaja Anil Pandya | Promoter Group | 1.86% | — |
| Ms. Vama Bharatbhai Pandya | Promoter Group | 0.27% | — |
| Ms. Parita Bharatbhai Pandya | Promoter Group | 0.27% | — |
| Mr. Pandya Shail Anil | Promoter Group | 0.54% | — |
| Mr. Bharat Jayantilal Pandya | Promoter | 48.95% | 35.98% |
| Mr. Pandya Anilkumar Jayantilal | Promoter | 43.91% | 32.28% |
| Ms. Alpa Bharat Pandya | Promoter Group | 1.84% | 1.35% |
| Ms. Shailaja Anil Pandya | Promoter Group | 1.86% | 1.36% |
| Ms. Vama Bharatbhai Pandya | Promoter Group | 0.27% | 0.20% |
| Ms. Parita Bharatbhai Pandya | Promoter Group | 0.27% | 0.20% |
| Mr. Pandya Shail Anil | Promoter Group | 0.54% | 0.39% |
| Bharat Jayantilal Pandya | Promoter | — | — |
| Pandya Anilkumar Jayantilal | Promoter | — | — |
| Bharat Jayantilal Pandya | Promoter/Chairman & Managing Director | 48.95% | 35.98% |
| Pandya Anilkumar Jayantilal | Promoter/Whole Time Director | 43.91% | 32.28% |
Leadership
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