Technichem Organics IPO: Date, Price, GMP & Details

Technichem Organics IPO-Complete Overview

Technichem Organics IPO under the SME IPO category is a book-built issue of Rs.25.25 crore (45.90 lac Shares) by Technichem Organics Limited, incorporated in Technichem Organics Limited started commercial manufacturing of chemicals and specialized chemicals, pigment and dye intermediates, and air oxidation chemicals in 1996.

The array of industries served by the company includes among others: pharmaceuticals, agriculture, coatings, pigments, dyes, etc. in order to depict the wide range of products manufactured by the Company.

The prime focus is to manufacture high-quality and precise chemical compounds and raw materials for the agrochemical, coating, pharma, dye, pigment, and specialty chemical market segments, with all manufacturing being done in-house.

The annual manufacturing capacity is said to be 950,000 kg. The company has 3 plants operating at this facility where the whole premise covers an area of 26,079 square meters. Approximately 11 countries have hosted the operations of the company worldwide. The biggest share of the exports flows to China.

Quality, environment, health, and safety are qualities by which the company is defined as realizing that high standards in products are prerequisites for growth in business. Quality systems have been implemented horizontally for all business processes, right from the manufacturing chain to supply and onward for product delivery.

Business Model:

Manufacturing of specialty chemicals and intermediates: Manufactures specialty chemicals, which are primarily chemical components that find use in agrochemicals, coating, pharma, dyes, and pigments.

Custom manufacturing: The Company also manufactures intermediates and other specialty chemicals on a make-to-order basis.

Contract manufacturing/exclusive manufacturing: The company customizes products according to customer requirements and offers them under confidentiality agreements. Such an example of product range includes pharmaceuticals, coating applications, specialty chemicals, etc.

Technichem IPO Overview

This Technichem Organics IPO date is 31 December, and its ‘initial public offering’ will end on 02 January 2025. 

The Rs.25.25 crore new SME IPO comprises a wholly fresh issue of 45.90 lac Shares.

This upcoming IPO date is on 31 December 2024. The Technichem Organics IPO Price is Rs.52 to Rs.55 for each Share. 

The expected IPO listing date is Tuesday, 07 January 2025, and listing at BSE and SME.

To open a demat account and apply for the IPO,  Click Here.

Company Financial

The company’s revenue fell by -8% and PAT increased by 173% during FYs ending 31 March 2024 and 31 March 2023.

(Amount in Lac)

Cash Flows

The cash flows for various activities are shown below:

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Business-wise Revenue Breakdown  

(Amount in lac)

 

Product-wise Revenue Breakdown  

(Amount in lac)

 

State-wise Revenue Breakdown  

(Amount in lac)

 

Country-wise Revenue Breakdown 

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The Objective of the Issue

The company desires to use the Net Proceeds from the Issue to fulfill its following goals:

• Financing the company's capital expenditure needs for the establishment of a new factory called "Plant 4".

• Full or partial return or prepayment of some of the company's borrowings from banks, financial institutions, and non-banking financial firms.

• General corporate purposes.

 

Peers of Technichem Organics IPO Ltd.

Note:-

The basic EPS of the peers is for the financial year ended on 31 March 2024.

Evaluation

The Technichem Organics Limited IPO share price is Rs.52 to Rs.55 for each Share.

Evaluation of P/E Ratio

Considering the FY ended 31 March 2024 with an EPS of Rs.3.71 from the last year, the resulting P/E ratio is 14.82x.

Considering the weighted EPS of Rs.2.81 for the last three years, the P/E ratio is 19.57x.

Comparative Analysis With Listed Peers

The average P/E Ratio of the industry is 93.50x.

 In simple words, the P/E ratio of this IPO (14.82x), compared with the industry’s average P/E of 93.50x, has an undervaluation (on a P/E ratio basis only). Hence the price of the Share seems fully priced for the investors when considered based on the average P/E ratio of the industry.

IPO's Strengths

• Versatile product feature.

• Operationalized Infrastructure with cost-effective integrated production.

• The Main thrust on constant R&D and value engineering and deriving complex chemistry and technology.

• Focus on Quality, Environment, Health, and Safety.

• Experienced Promoters and Management team.

• Supply chain efficiency

• Long-term relationships with diversified customers throughout the geography.

 

IPO’s Weaknesses

• Reliance on Key Customers: The company depends on a few very major key customers for a large portion of its revenues. Often, 36% to 47% of total revenues come from the top five customers in recent years. The company does not have long-term contracts with such customers, thus increasing the risk.

• Inventory and Supply Chain Management: Improper handling of inventory or delays in the sourcing of raw materials and machinery may hurt the company’s goodwill and operational results.

• Economic Conditions and Inflation: The effects of changing global economic conditions, mostly in target geographies, and inflation in India could likely reduce profitability.

• Regulatory and Legal Risk: Laws and tax regulations already change often and introduce legal uncertainties that turn into potential risks to operations and financial performance.

• Climate Change and Natural Calamities: Company operations may be affected by natural disasters, climate change, and health epidemics. Financial performance and employee access to facilities can be affected by these events.

Technichem Organics IPO GMP

Technichem Organics IPO GMP today is Rs.11 as of 26 December 2024. With a price of Rs.55, the estimated Technichem Organics IPO listing price is Rs.66.

IPO Timetable (Tentative)

The IPO opening date is December 31, with allotment on January 03, 2025, refund initiation on January 06, 2025, and listing on January 07, 2025.

The Technichem IPO with a Face Value of Rs.10 per share offers a total issue size of 45,90,000 Shares (Rs.25.25 Cr).

Technichem Organics Limited IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (2000 Shares) amounting to Rs.110000 and in multiples thereof, while for HNI investors, the minimum Lot is 2 (4000 Shares) amounting to Rs.220000.

 

IPO Reservation (% of Net Issue)

 

Promoters And Management of Technichem Organics Ltd.

• Mr. Bharat Jayantilal Pandya

• Mr. Pandya Anilkumar Jayantilal. 

 

IPO Lead Managers

Shreni Shares Limited.

Dividend Policy

The company has not paid dividends in the last three FYs.

Conclusion

Investors in Technichem Organics IPO need to consider risks such as dependence on key customers and regulatory uncertainties, but they also have a strong management team and vision for an efficient infrastructure. Compared to industry peers in terms of P/E valuation, it appears attractive on price terms. Before investment, it will be worthwhile to review numbers vis-a-vis growth potential.

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: NOT a buy or sell recommendation. No investment or trading advice is given. The content is purely for educational and information purposes only. Always discuss with an eligible financial advisor before investing.

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