Kronox Lab Sciences Ltd IPO: Review, Valuation, Date & GMP

Kronox Lab Sciences Limited IPO - Complete Overview

Established in 2008, Kronox Lab Sciences Limited manufactures High Purity Specialty Fine Chemicals for a diverse range of end-user industries. 

These chemicals are primarily used as reacting agents and raw materials in the manufacturing of Active Pharmaceutical Ingredients (APIs), excipients in pharmaceutical formulations, reagents for scientific research and laboratory testing, ingredients in nutraceutical formulations, process intermediates and fermenting agents in biotech applications, ingredients in agrochemical formulations, personal care products, refining agents in metal refineries, and ingredients in animal health products, among other uses.

The company offers a portfolio of over 185 products, including phosphates, sulfates, acetates, chlorides, citrates, nitrates, nitrites, carbonates, EDTA derivatives, hydroxides, succinates, and gluconates. 

These products are supplied to customers in India and over 20 countries worldwide, including the United States, Argentina, Mexico, Australia, Egypt, Spain, Turkey, the United Kingdom, Belgium, the United Arab Emirates, and China.

Kronox Lab Sciences operates three manufacturing facilities located in Vadodara, Gujarat, near the seaports of Mundra, Kandla, Hazira, and Nhava Sheva. These facilities cover a total area of 17,454 square meters and, as of December 31, 2023, have an aggregate installed capacity of 7,242 TPA. Units I and II hold certifications such as FSSC 22000 (Version 5), ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018, along with Kosher, Halal, GMP, and GLP certifications.

The company has served over 592 customers in the last three financial years, with 141 of them placing repeat orders. Over time, Kronox Lab Sciences has expanded its product portfolio to include more than 185 products.

 

Kronox Lab Sciences Limited IPO Overview

Kronox Lab Sciences Limited IPO date is slated to be open for subscription from June 3, 2024, to June 5, 2024. This Mainboard IPO follows a Book Built Issue IPO.

Kronox Lab Sciences Limited IPO price is fixed in the range of Rs.129 to Rs.136 per share. 

The total issue size of this IPO amounts to Rs.130.15 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, Kronox Lab Sciences Limited has seen growth in net worth and total revenue but a decrease in total assets. The profit after tax has also increased.

Amount in Crore

Period	31 Dec 2023	31 Mar 2023	31 Mar 2022
Total Assets	66.96	54.03	56.79
Total Revenue	68.44	97.50	83.34
PAT	15.47	16.62	13.63
Net worth	60.28	44.68	40.35
Reserve & Surplus	15.56	7.58	40.11
Total Borrowings			0.64

 

Industry-wise Revenue Breakup

(Amount in Millions)

Industry	December 31, 2023	Fiscal 2023	Fiscal 2022
Pharmaceuticals	305.46	389.78	337.24
Scientific Research and Laboratory Testing	179.65	279.23	267.63
Nutraceuticals	160.54	245.22	174.77
Others	31.21	41.55	42.83
Total	676.86	955.78	822.47

 

 

Geography-wise Revenue Break up

(Amount in Millions)

Geography	December 31, 2023	Fiscal 2023	Fiscal 2022
India (Domestic Sales)	446.09	654.46	572.53
Export	169.70	242.68	192.95
India (SEZ Sales)	55.63	49.66	42.66
Merchant Export	5.43	8.97	14.33
Total Revenue from Operations	676.86	955.78	822.47

 

The Objective of the Issue

The objectives of the Offer are to:

1. Conduct the Offer for Sale of up to 9,570,000 Equity Shares by the Promoter Selling Shareholders.

2. Achieve the benefits of listing the Equity Shares on the Stock Exchanges. Additionally, the company expects that listing the Equity Shares will enhance its visibility and brand image, provide liquidity to existing shareholders, and create a public market for its Equity Shares in India.

 

Peers of Kronox Lab Sciences Limited IPO

Name of the Company	Face Value (Rs)	EPS (Rs)	P/E Ratio
Kronox Lab Sciences Limited	10	4.30	-
Tatva Chintan Pharma Chem Limited	10	19.45	57.57
Tanfac Industries Limited	10	56.27	39.15
Neogen Chemicals Limited	10	18.94	77.55
Sigachi Industries Limited	1	1.42	46.64
DMCC Speciality Chemical Limited	10	2.78	116.57

 

Evaluation

The IPO is priced within the range of Rs.129 to Rs.136 per share.

Evaluation of P/E Ratio

• Considering the FY23 EPS of Rs 4.30 from the last year, the resulting P/E ratio is 31.62x.

• Taking into account the weighted EPS of Rs 3.71 for the last three years, the P/E ratio amounts to 36.65x.

Comparative Analysis with Listed Peers

• The industry's average P/E is 67.50x.

As a result, the IPO price range, with a P/E ratio ranging from 31.62x to 36.65x, seems fully priced to the industry average of 67.05x.

 

IPO's Strengths

• Extensive product range with applications across diverse end-user industries.

• Established long-term customer relationships.

• Significant entry and exit barriers due to protracted customer approval cycles and stringent product standards.

• Strong emphasis on Research & Development (R&D) and Quality Control.

• Zero debt with a record of strong and consistent financial performance.

• Strategically located manufacturing facilities that enhance supply chain efficiency.

• Experienced promoters and senior management with profound domain expertise.

 

IPO's Weaknesses

• The majority of the company's product sales are concentrated in the Pharmaceuticals and Scientific Research and Laboratory Testing industries. Any changes in demand or application processes in these industries could result in revenue and profit loss.

• Failure to develop new High Purity Specialty Fine Chemicals may impact the company's future growth and business prospects.

• The company relies on third-party transportation and logistics providers for delivering products to customers and receiving raw materials at its manufacturing facilities.

• The company will not receive any proceeds from the Offer for Sale by the Promoter Selling Shareholder.

• Compared to other industry players and listed peers, the company's revenue from operations is relatively small.

• The company may face limitations in expanding its production capacity and product range at Unit-III due to restrictions imposed by GPCB on expansions in the Padra region near Vadodara, Gujarat, because of groundwater contamination issues.

 

IPO GMP Today

The Latest GMP of Kronox Lab Sciences Limited is Rs.40.

 

Kronox Lab Sciences Limited IPO timetable (Tentative)

Kronox Lab Sciences Limited IPO is scheduled from June 3 to June 5, 2024, with allotment on June 6, refund initiation on June 7, and listing on June 10, 2024.

Events	Date
IPO Opening Date	June 3, 2024
IPO Closing Date	June 5, 2024
IPO Allotment Date	June 6, 2024
Refund initiation	June 7, 2024
IPO Listing Date	June 10, 2024

 

Kronox Lab Sciences Limited IPO Details 

Kronox Lab Sciences Limited IPO, with a face value of Rs.10 per share, opens on June 3 and closes on June 5, 2024, offering 9,570,000 shares at Rs.129 to Rs. 136 per share, with a lot size of 110 shares, aiming to raise Rs.130.15 Cr, and will be listed on NSE and BSE.

IPO Opening & Closing Date	June 3, 2024 to June 5, 2024
Face Value	Rs.10 per share
Issue Price	Rs.129 to Rs. 136 per share
Lot Size	110Shares
Price of 1 lot	Rs. 14,960
Issue Size	9,570,000 Shares (aggregating up to Rs.130.15 Cr)
Offer for Sale	9,570,000 Shares (aggregating up to Rs.130.15 Cr)
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Kfin Technologies Limited

 

 

Kronox Lab Sciences Limited IPO Lot Details 

For Kronox Lab Sciences Limited IPO, the retail investor can invest in a minimum and 1 lot (110 shares) at Rs.14,960 and a maximum of 13 lots (1430 shares) at Rs.194,480 while for HNI investors, the minimum investment is 14 lots (1540 shares) at Rs.209,440.

Minimum Lot Investment (Retail)	1 lot
Maximum Lot Investment (Retail)	13 lot
Minimum Lot Investment (HNI)	14 lot
Maximum Lot Investment (HNI)	67 lot

 

Kronox Lab Sciences Limited IPO Reservation

Institutional Share Portion	50%
Non-institutional Share Portion	15%
Retail Share Portion	35%

 

Promoters and Management of Kronox Lab Sciences Limited

• Jogindersingh Jaswal

• Ketan Ramani 

• Pritesh Ramani

Pre-issue Promoter shareholding	99.98%
Post-issue Promoter shareholding	74.21%

 

Kronox Lab Sciences Limited IPO Lead Managers

• Pantomath Capital Advisors Pvt Ltd

 

Dividend Policy

The company did not pay any dividends on the equity shares in the last three financial years.

 

Conclusion

The company operates in the High Purity Specialty Fine Chemicals sector and offers a wide range of products. It holds a monopoly in certain products and consistently demonstrates strong financial performance. Investors should consider applying for the upcoming IPO to achieve optimal profit.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

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.

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