Indian Emulsifier Ltd IPO: Review, Valuation, Date & GMP

Indian Emulsifier Limited IPO  - Complete Overview

Established in 2020, Indian Emulsifier Limited specializes in the manufacturing and supply of specialty chemicals, including Esters, Amphoterics, Phosphate Esters, Imidazolines, Wax Emulsions, SMO & PIBSA Emulsifiers. 

With a manufacturing facility boasting a production capacity of 4,800 metric tons per annum—recently upgraded from 2,400 MT per annum—the company is equipped with state-of-the-art infrastructure, including process control systems, an innovative R&D center, Quality Control, and Application Laboratories.

The company's primary products include:

1. Esters

2. Amphoterics

3. Phosphate esters

4. Imidazolines

5. Wax emulsions

6. SMO & PIBSA Emulsifiers

Certified with ISO 9001:2015, the company caters to a diverse range of industries, including Mining, Textile, Cleaning, PVC/Rubber, Personal Care, Food, and others. 

With two warehouses located in Raigad and Ratnagiri, Maharashtra, the company offers over 40 specialty chemicals to meet the varied needs of its clientele.

Indian Emulsifier Limited IPO Overview:

Indian Emulsifier Limited IPO date is slated to be open for subscription from May 13, 2024, to May 16, 2024. This NSE SME IPO follows a Book Built Issue IPO.

Indian Emulsifier Limited IPO price is fixed in the range of Rs.125 to Rs.132 per share. 

The total issue size of this IPO amounts to Rs.42.39 Cr. The company has allocated shares 35% to retail investors, 50% to institutional and 15% to non-institutional investors.

Company Financial

Compared to the financial year ending March 31, 2023, and March 31, 2022, Indian Emulsifier Limited has seen growth in total assets, net worth, and total revenue. The profit after tax and total borrowing has also grown.

Amount in Lakhs

Industry-wise Revenue Break up

(Amount in Lakhs)

 

The Objective of the Issue

The net proceeds from the issue will be utilized for the following purposes:

1. Funding capital expenditure requirements for Plant & Machinery, Civil work, and associated installation costs.

2. Meeting working capital requirements of the company.

3. Allocation towards general corporate purposes.

Peers of Indian Emulsifier Limited IPO

 

 

Evaluation

The IPO is priced within the range of Rs.125 to Rs.132 per share.

Evaluation of P/E Ratio

• Considering the FY23 EPS of Rs 4.80 from the last year, the resulting P/E ratio is 27.5x.

• Taking into account the weighted EPS of Rs 2.42 for the last three years, the P/E ratio amounts to 54.54x.

Comparative Analysis with Listed Peers

• The industry's average P/E is 51.20x.

As a result, the IPO price range, with a P/E ratio ranging from 27.5x to 54.54x, seems fully priced to the industry average of 51.20x.

IPO's Strengths 

• Seasoned Promoter and Management Team with extensive expertise.

• Business Model designed for scalability.

• Extensive portfolio of products catering to diverse needs.

• In-house manufacturing facility equipped with advanced machinery and processes.

• In-house Quality Control and Research & Development facilities further enhance product quality and innovation.

IPO weaknesses 

• The company has limited operating history.

• The Pending litigation against company poses potential risks to business operations.

• Dependency on specific industries for a significant portion of sales could impact business stability.

• Manufacturing processes involve hazardous chemicals, presenting inherent risks and compliance obligations.

• Strict quality standards pose risks of order cancellations due to product defects or non-compliance.

• Risks associated with obtaining, renewing, or maintaining regulatory licenses and approvals.

• Operation within a highly competitive industry landscape.

• Compliance challenges with environmental, health, and safety regulations may affect business operations.

• Concentration of manufacturing facilities in a single region, Lote, Maharashtra, poses risks to business continuity and growth if operations are disrupted in this area.

IPO GMP 

The latest GMP of Indian Emulsifier Limited is Rs 240.

Indian Emulsifier Limited IPO timetable (Tentative)

Indian Emulsifier Limited IPO is scheduled from May 13 to May 16, 2024, with allotment on May 18, refund initiation on May 19, and listing on May 20, 2024.

 

 

Indian Emulsifier Limited IPO Details 

Indian Emulsifier Limited IPO, with a face value of Rs.10 per share, opens on May 13 and closes on May 16, 2024, offering 3,211,000 shares at Rs.125 to Rs. 132 per share, with a lot size of 1000 shares, aiming to raise Rs.42.39 Cr, and will be listed on NSE SME.

Indian Emulsifier Limited IPO Lot Details 

For Indian Emulsifier Limited IPO, the retail investor minimum and maximum lot investments are both 1 lot (1000 shares) at Rs.132,000 while for HNI investors, the minimum investment is 2 lots (2000 shares) at Rs.264,000.

Indian Emulsifier Limited IPO Reservation

 

Promoters and Management of Indian Emulsifier Limited 

• Yash Tikekar

 

Indian Emulsifier Limited IPO Lead Managers:

• Ekadrisht Capital Private Limited 

Dividend Policy

The Company has not declared any dividend in last three financial years.

Conclusion

The company operates in a competitive market, and currently, the chemical segment is not experiencing any fancy growth. However, the company consistently generates good revenue in both its top and bottom lines. Experienced investors, after thorough evaluation, may consider applying for this upcoming IPO.

Disclaimer: This IPO Analysis is only for informational purposes and should not be considered as investment advice. Always do your research and consult with a financial advisor.

Want to start Your Journey in stock market trading and investment? Join our Stock Market Class to become beginner to expert trader! We cover everything from the basics of trading to advanced strategies for picking stocks. Plus, we're offering a special discount for women and students. Don't miss out - enroll now and kickstart your path to success in the stock market!

Open a world of Stock Market by Opening a Demat Account with your favourite Broking firm & Get a trading Strategy worth Rs.15,000!

• AngelOne
• Zerodha
• Upstox
• Alice Blue