About the Company:
Tatva Chintan Pharma Chem Ltd is a specialty chemicals manufacturing company engaged in the manufacture 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. It also enjoys the second largest position globally.
In addition, Company is one of the leading global producers of an entire range of PTCs in India and one of the key producers across the globe.
Company’s products have wide applications and serves customers across various industries, including the automotive, petroleum, pharmaceutical, agro chemicals, paints and coatings, dyes and pigments, personal care and flavour and fragrances industries.
Apart from customers in India, company also exports the products to over 25 countries, including the USA, China, Germany, Japan, South Africa, and the UK.
During the Fiscal ended 2020, exports of products accounted for 76.74%, of company’s revenue from operations.
Company’s Customers:
Company’s customers include Merck, Bayer AG, Asian Paints Ltd., Ipox Chemicals KFT, Laurus Labs Ltd., Tosoh Asia Pte. Ltd., SRF Ltd, Navin Fluorine International Ltd, Oriental Aromatics Ltd., Atul Ltd, Otsuka Chemical (i) Pvt Ltd., Meghmani Organics Ltd, Divi’s Laboratories Ltd, Hawks Chemical Company Ltd, Firmenich Aromatics Prod.(I) Pvt. Ltd., Jiangsu Guotai Super Power New Materials Co., Ltd. and Jade Chem Co. Ltd.
Company’s Products:
As on December 31, 2021, company manufactured over 138 products which can be divided into the following four broad categories:
- Structure Directing Agents.
- Phase Transfer Catalysts.
- Electrolyte salts for super capacitor batteries.
- Pharmaceutical and agrochemical intermediates and other specialty chemicals.
Electrolyte salts for super capacitor batteries.
The electrolyte salts manufactured by the company are used in the manufacture of super capacitor batteries, which are used in automobile batteries and other batteries. Company is the largest producer of electrolyte salts for super capacitor batteries in India.
Pharmaceutical and agrochemical intermediates and other specialty chemicals.
The products manufactured by company under this category are used in the manufacture of various pharmaceutical and agrochemical products as intermediates, disinfectants and catalysts, and solvents.
In addition, company also manufactures specialty chemicals under this category that are used in dyes and pigments, personal care ingredients, flavour and fragrance sectors.
Company’s Manufacturing facilities:
Company was incorporated on June 12, 1996 and currently operates through two manufacturing facilities situated at Ankleshwar and Dahej in Gujarat, both of which are strategically located very close to the Hazira port.
These manufacturing facilities have an annual installed reactor capacity of 280 KL and 13 Assembly Lines, as on March 31, 2020 and as of the nine months ended December 31, 2020, respectively.
Over the years, company has invested in processes and manufacturing infrastructure and systems. From Fiscal 2018 to Fiscal 2020, company’s installed reactor capacity grew from 130 KL to 280 KL, and Assembly Lines grew from 10 Assembly Lines to 13 Assembly Lines respectively.
Company’s R&D facility:
Company has a dedicated R&D facility that is recognized by the Department of Scientific and Industrial Research (“DSIR”), Government of India, at Vadodara, Gujarat, with state-of-the-art research and development infrastructure.
Management Team:
- Mr. Chintan Nitinkumar Shah (Designation: Managing Director)
- Mr. Ajaykumar Mansukhlal Patel (Designation: Whole Time Director)
Company’s Promoters:
Company is promoted by Chintan Shah, Ajay Patel and Shekhar Somani, who each have over 24 years in the specialty chemicals manufacturing industry and have established strong business relationships with domestic as well as overseas customers.
Competitors in the business.
Company operates in a competitive environment and we expect to face greater competition from existing competitors located both in India and globally, and in particular from companies in India, USA and China.
Company competes with large multinational companies and smaller regional competitors.Our competitors include Aarti Industries, PI Industries, Fine Organic Industries Ltd, Delta Finochem, Dishman group and Pacific Organics Private Ltd.
Objectives of the Issue:
Offer for Sale: (Rs. 225 cr)
- The proceeds from the Offer for Sale shall be received by the Selling Shareholders.Company will not receive any proceeds from the Offer for Sale.
Fresh Issue: (Rs. 225 cr)
- Funding capital expenditure requirements for expansion of our Dahej Manufacturing Facility.
- Funding capital expenditure requirements for upgradation at our R&D facility in Vadodara.
- General corporate purposes.
Positives for the Company:
Leading manufacturer of structure directing agents and phase transfer catalysts, with consistent quality.
- With very few players in the Indian and global market, Tatva Chintan Pharma Chem Ltd is the largest and only commercial manufacturer of SDAs for zeolites in India. It also enjoys the second largest position globally.
Global presence with a wide customer base across various industries.
- Company supplies the products to customers in India and also exports to over 25 countries, including the USA, China, Germany, Japan, South Africa and the UK.
- During the Fiscals ended March 31 2020, and in the nine months ended December 31, 2020, exports of products accounted for 76.74% and 70.72% of revenue from operations, respectively.
- Company also has two wholly owned subsidiaries in the USA and Netherlands, to facilitate the overseas operations.
High Entry barriers in specialty chemicals business.
- The specialty chemicals manufacturers enjoy strong entry barriers in the form of vendor acquisition, lengthy and complex product approval, registration process, customer loyalty among others.
- These barriers help companies ensure sustainable growth. Further, a distinguished and resilient business model is also a unique driver for these companies.
- The level of technical skill and expertise that is essential for developing in-house innovative processes, undertaking complex chemistries and handling some of the raw materials and intermediates, requires a significant amount of training that can only be achieved over a period of time thereby creating a further entry barrier for new entrants.
Diversified specialised product portfolio requiring strong technical know-how.
- Company has, over the years, diversified, expanded, and evolved our operations into manufacturing of pharmaceutical and agrochemical intermediates and other specialty chemicals, which have diverse applications across various industries.
Expand the existing product portfolio.
- Company plans to continue to increase offerings in the current business segments as well as diversify into new products by tapping into segments which in the view of our management have attractive growth prospects.
Established Long standing relationships with marquee players across various industries.
- Company’s customers include Merck, Bayer AG, Asian Paints Ltd., Ipox Chemicals KFT, Laurus Labs Ltd., Tosoh Asia Pte. Ltd., SRF Ltd, Navin Fluorine International Ltd, Oriental Aromatics Ltd., Atul Ltd, Otsuka Chemical (i) Pvt Ltd., Meghmani Organics Ltd and Divi’s Laboratories Ltd.
Financials of the Company:
| (in Crores) | FY 18 | FY 19 | FY 20 | 31st Dec 20 |
|---|---|---|---|---|
| Revenue | 137.28 | 206.8 | 264.6 | 195.0 |
| Net Profit | 12.2 | 20.5 | 37.7 | 31.1 |
Valuation of Peer Group Companies:
| Company Name | Face Value | EPS | PE Ratio | RoNW | NAV |
|---|---|---|---|---|---|
| Tatva Chintan Pharma Chem Ltd | 10 | 18.81 | 57.57 | 32.11% | 58.59 |
| Aarti Industries Ltd | 5 | 30.77 | 41.85 | 17.44% | 17.64 |
| Navin Fluorine International Ltd | 2 | 82.53 | 30.91 | 28.97% | 28.53 |
| Alkyl Amines Chemicals Ltd | 5 | 98.44 | 59.29 | 37.25% | 26.29 |
| Vinati Organics Ltd | 1 | 32.48 | 44.11 | 26.06% | 12.45 |
| Fine Organics Industries Ltd | 5 | 53.75 | 41.72 | 26.06% | 53.75 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 16th July 2021 |
| Issue Closes on:. | 20th July 2021 |
| Issue Price | Rs.1073- 1083 |
| Face Value | Rs.10 |
| Retail Category Allocation | 35% |
| Minimum Lot | 13 |
| Minimum Investment | Rs.14,079 |
| Issue Constitutes | 18.74% |
| Issue Size | Rs.450 cr ($60 million) |
| Market Cap | Rs. 2400 cr ($ 324 million) |
| Listing at | NSE & BSE |
| Equity Shares Offered (Fresh) | 20,77,562 |
| Equity Shares Offered (OFS) | 20,77,562 |
| Equity Shares Offered (Fresh + OFS) | 41,55,124 |
| Equity Shares Prior to the Issue | 2,00,87,500 |
| Equity Shares after the issue | 2,21,65,062 |
Also Read : List of Upcoming IPO’s in India.
Important Dates:
| Finalization of Basis of Allotment | on or Before 26th July 2021 |
| Initiation of Refunds | on or Before 27th July 2021 |
| Credit of Equity Shares: | on or Before 28th July 2021 |
| Listing Date: | on or Before 29th July 2021 |
Subscription Details: (Will be Updated)
| (Subscription-Category-Wise (no. of times) Till time : 06:00 PM) | Shares Offered | Day-1 | Day-2 | Day-3 |
|---|---|---|---|---|
| QIB | 9,31,966 | 0.50 | 1.97 | 185.23 |
| NII | 6,98,975 | 1.14 | 12.21 | 512.22 |
| Retail | 16,30,941 | 8.25 | 23.74 | 35.35 |
| Employee | ——– | —- | —– | —– |
| TOTAL | 32,61,882 | 4.51 | 15.05 | 180.36 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 18.81 | 57.57 | 32.11% | 58.59 |
| Check IPO Allotment Status: |
|---|
Link InTime Website: https://linkintime.co.in/PublicIssue/BSE IPO Website: https://www.bseindia.com/IPO/Allotment |
| Company Contact Info: |
|---|
| Tatva Chintan Pharma Chem Ltd Plot No. 502 / 17, GIDC Estate Ankleshwar, Bharuch Gujarat – 393 002, India Telephone: +91 75730 46951 / +91 75730 46952 E-mail: cs@tatvachintan.com Website: www.tatvachintan.com |
| IPO Registrar Info: |
|---|
| Link Intime India Private Limited C-101, 1st Floor, 247 Park Lal Bahadur Shastri Marg, Vikhroli (West) Mumbai, Maharashtra – 400 083 India Telephone: +91 (22) 4918 6200 E-mail: tatva.ipo@linkintime.co.in Website: www.linkintime.co.in |
