About the Company:
Ushanti Colour Chem Ltd is in the business of manufacturing and trading of various colours of dyestuffs.
Currently company manufactures reactive and direct dyestuffs also known as Synthetic Organic Dyes with an integrated production process.
After getting permission for manufacturing of CPC Blue Crude dyestuff and witnessing the growing demand of their CPC Blue product, Company decided to focus into business of manufacturing on one specific product type and specialise in it. Company currently concentrates in manufacturing “Turquoise Blue” Dyestuffs and Pigments.
Company also manufactures Copper Phthalocyanine, Blue Cued which are one of the major raw materials used for manufacturing of Dyestuffs. The pigment and dyestuffs manufactured by the company caters to the raw material requirement of textile, garment, cotton, leather, nylon, paper, wool, ink, wood, plastic and paint industries.
Company also has its own Ice generation machinery, further it recovers Ammonium Carbonate from its effluent stream which are reused in the plant as well as sold to the Soda Ash Industry reducing wastage giving us incremental revenue.
Company currently has a production capacity of approx. 2,520 tons per annum.
Geography Wise Revenue: (in Lakhs)
Company’s Proposed Facility:
Company has acquired a land which is spread over an area of 75,060 sq. meters at Saykha Industrial Estate – Bharuch, Gujarat to set up a new integrated manufacturing facility with an installed capacity of 16,140 tons per annum while permitted capacity being approx. 32,800 tons per annum.
This facility at Bharuch is planned to manufacture Dyestuffs as well as intermediates used in manufacturing dyestuffs. Our company intends to commence the operation in this facility by F.Y. 2020-21 in 2 phases.
Company’s Plant Capacity:
By completing its projects in 2 phases, Company by FY 2020-21, product wise installed capacity p.a. will be as under:
Management Team:
- Mr. Maunal Shantilal Gandhi (Designation: Joint Managing Director)
- Mr. Minku Shantilal Gandhi (Designation: Joint Managing Director)
- Mr. Shantilal Bhailal Gandhi (Designation: Chairman and Executive Director)
Objectives of the Issue:
- To finance setting up of Dyestuff Pigment and Intermediates manufacturing facility at GIDC Saykha Industrial Estate, Bharuch.
- Repayment/pre-payment of certain secured borrowings availed by the Company.
- General Corporate Purposes.
Fund Utilization:
| Particulars | Amount (Rs. in Crores) |
|---|---|
| To finance setting up of Dyestuff Pigment and Intermediates manufacturing facility at GIDC Saykha Industrial Estate, Bharuch. |
3.0 |
| Repayment/pre-payment of certain secured borrowings availed by the Company |
5.80 |
| General Corporate Expenses | 2.25 |
| Net Proceeds | 11.05 cr |
Positives for the Company:
Expanding Customer Base.
Dye manufacturing is done only in India, China and Indonesia. However, India and China meets the substantial portion of global demand and hence the market for manufacturers in India is huge. The company’s product is currently marketed majorly in Asia and Middle East.
company also plans to cater the market of other international locations, viz., UK, USA, Canada, etc. The demand for dye is ever increasing including in India.
Decreasing Competition from China.
Dye industry has only 2 major players across the globe, India and China apart from Indonesia. With increasing environmental norms and strict governmental regulations w.r.t operating a chemical industry, the competition which was being faced due to China is slowly eroding.
There have been shutdowns of many facilities in China positively impacting the dye industry in India consequently growth in Dye prices. With decrease in total supply, dye manufacturers have huge opportunity both in terms of volume and value.
Reduction in Cost due to Production of Intermediates:
Dyestuffs manufacturing involves use of many raw materials and intermediates in the whole process, prices of which are highly volatile and forms a significant part of total manufacturing costs.
Further, dependency on third party suppliers affects the overall costs.Hence, Company has been into manufacturing of one of the intermediates, CPC Blue, which helps them to reduce their dependency on third parties, thus saving substantial amount.
Established Relationship with Clients.
Company generates most of its revenue from export operations, it has trusted buyers in foreign countries from which they receive repeated orders in frequent intervals. The repetition of orders is basically owing to the quality of the products.
Business Expansion.
Company intends to expand the business by setting up a new facility with a manufacturing capacity of around 16,140 tons per annum in various phases while the permitted capacity is around 32,800 tons p.a.
To implement this, Company has already purchased a land measuring 75,060 sq. meters in Saykha Industrial Estate – Bharuch, Gujarat. The machineries required for this facility would be funded partly by proceeds of this issue and partly from other sources of funds. The facility is expected to commence by F.Y. 2020-21 in various stages.
Niche Player in the Dyestuffs Segment.
Company’s focus on “Turquoise Blue” Dyestuffs has assisted them to be become a niche player in the segment.
Company generates most of its revenue from export operations and has received from Certificate of Recognition as Export House, products of the company are exported to countries like, Turkey, Egypt, Bangladesh, Pakistan, Indonesia, China etc.
Financials of the Company:
| (in Crores) | FY 13 | FY 14 | FY 15 | FY 16 | FY 17 | FY 18 |
|---|---|---|---|---|---|---|
| Revenue | 24.14 | 35.41 | 29.70 | 25.11 | 29.62 | 36.74 |
| Net Profit | 0.42 | 2.12 | 0.25 | 0.25 | 1.27 | 2.38 |
Valuation of Peer Group Companies:
| Company Name | Face Value | EPS | PE Ratio | RoNW | NAV |
|---|---|---|---|---|---|
| Ushanti Colour Chem Limited | 10 | 4.44 | 13.51 | 27.42% | 16.18 |
| Yash Chemex Ltd | 10 | 1.17 | 68.72 | 8.44% | 13.92 |
| Mahickra Chemicals Limited | 10 | 1.07 | 42.80 | 14.86% | 7.19 |
| Meghmani Organics Limited | 1 | 3.03 | 26.44 | 11.04% | 27.43 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 23rd July 2018 |
| Issue Closes on:. | 25th July 2018 |
| Issue Price | Rs.57 – 60 |
| Face Value | Rs.10 |
| Minimum Lot | 2000 |
| Minimum Investment | Rs.1,20,000 |
| Issue Constitutes | 26.38% |
| Issue Size | Rs.11.55 cr |
| Market Cap | Rs.43.81 cr |
| Listing at | NSE SME |
| Equity Shares Offered (Fresh) | 19,26,000 |
| Equity Shares Prior to the Issue | 53,75,700 |
| Equity Shares after the Issue | 73,01,700 |
Important Dates:
| Finalization of Basis of Allotment | on or Before 30th July 2018 |
| Initiation of Refunds | on or Before 31st July 2018 |
| Credit of Equity Shares: | on or Before 1st August 2018 |
| Listing Date: | on or Before 2nd August 2018 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 4.44 | 13.51 | 27.42% | 16.18 |
| Check IPO Allotment Status: |
|---|
Bigshare Website (Click on the below Link)http://www.bigshareonline.com/bssipoapplicationstatus.aspx |
Knowledge Corner: (Click on the Link)
| Company Contact Info: |
|---|
| Ushanti Colour Chem Limited 88/8, GIDC, Phase I, Vatva, Ahmedabad 382445, Gujarat, India Tel: 079-25833315 Email: admin@ushanti.com Website: www.ushanti.com |
| IPO Registrar Info: |
|---|
| BIGSHARE SERVICES PRIVATE LIMITED 1st Floor, Bharat Tin Works Building, Opp. Vasant Oasis, Makwana Road, Marol, Andheri East, Mumbai 400059, Maharashtra, India Tel: +91 22 6263 8200 Fax: +91 22 6263 8299 Email: ipo@bigshareonline.com Website: www.bigshareonline.com |
| Lead Manager to the Issue: |
|---|
| PANTOMATH CAPITAL ADVISORS PRIVATE LIMITED 406-408, Keshva Premises, Behind Family Court, Bandra Kurla Complex, Bandra (East), Mumbai – 400051, Maharashtra, India Tel: +91-22 6194 6700 Fax: +91-22 2659 8690 Email: ipo@pantomathgroup.com Website: www.pantomathgroup.com |
