Shivam Chemicals Ltd IPO: Review, Valuation, Date & GMP

Shivam Chemicals Limited IPO  - Complete Overview

Established in 2010, Shivam Chemicals Limited is a manufacturer of Hydrated Lime (Calcium Hydroxide) and a distributor of various products, including Poultry feed supplements (MBM), Di-Calcium Phosphate (Feed Grade), Magnesium Oxide, and Limestone Powder, among others. 

Over the years, the company has successfully supplied an impressive quantity of over 2.50 Lakh metric tons of various products, with a cumulative value exceeding INR 7,500 million.

The company maintains an average monthly sales volume of over 2,650 metric tons. Its wholly owned subsidiary, Shivam Chemicals and Minerals Private Limited, situated in Dahej, Gujarat, boasts a manufacturing capacity of 60,000 MT and is primarily engaged in producing Hydrated Lime (Calcium Hydroxide) products.

The diversified product portfolio of Shivam Chemicals Limited includes Poultry Feed Supplements, Di-calcium Phosphate, Magnesium Oxide, Limestone Powder, and Hydrated Lime (Calcium Hydroxide).

As of December 31, 2023, the company operates with a consolidated workforce of 25 employees, inclusive of 12 contract labourers sourced from its subsidiary company, Shivam Chemicals and Minerals Private Limited.

Shivam Chemicals Limited IPO Overview:

Shivam Chemicals Limited IPO date is slated to be open for subscription from April 23, 2024, to April 25, 2024. This BSE SME IPO follows a Fixed Price Issue IPO.

Shivam Chemicals Limited IPO price is fixed at Rs.44 per share. 

The total issue size of this IPO amounts to Rs.20.18 Cr. The company has allocated shares 50% to retail investors and 50% to other investors.

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Company Financial

Compared to the financial year ending December 31, 2023, and March 31, 2023, Shivam Chemicals Limited has seen growth in total assets and net worth but decreased in total revenue. The profit after tax has decreased while the total borrowing increased.

Amount in Lakhs

Period	31 Dec 2023	31 Mar 2023
Total Assets	3,881.92	3,117.11
Total Revenue	10,710.70	15,658.34
PAT	70.79	357.44
Net worth	1,399.64	1,328.35
Reserve & Surplus	159.64	1,288.85
Total Borrowings	1,638.20	1,351.37

 

The Objective of the Issue

The company intends to utilize the net proceeds from the issue to fund the following objectives:

1. Meeting the working capital requirements of the company.

2. Investing in its subsidiary, M/s Shivam Chemicals & Minerals Pvt Ltd., to enhance its working capital capabilities.

3. Addressing general corporate purposes.

 

 

Peers of Shivam Chemicals Limited IPO

 

Name of the Company	Face Value (Rs.)	EPS (Rs.)	P/E Ratio
Shivam Chemicals Limited	10.00	2.88	15.26
Narmada Agrobase Limited	10.00	0.48	48.96
GodrejAgrovet	10.00	15.71	34.33

 

Evaluation

The IPO is priced within the range of Rs.44 per share.

Evaluation of P/E Ratio

• Considering the FY23 EPS of Rs 2.88 from the last year, the resulting P/E ratio is 15.26x.

• Taking into account the weighted EPS of Rs 2.75 for the last three years, the P/E ratio amounts to 16x.

Comparative Analysis with Listed Peers

• The industry's average P/E is 41.77x.

As a result, the IPO price range, with a P/E ratio ranging from 15.26x to 16x, seems aggressively priced to the industry average of 41.77x.

Shivam Chemicals IPO Strengths 

• The board of directors and management team are highly educated and possess extensive experience.

• In-house manufacturing is facilitated through a wholly-owned subsidiary.

• The company holds a technological competitive advantage.

• Logistic efficiency is a key strength of the company.

Shivam Chemicals IPO weaknesses 

• The subsidiary company is engaged in manufacturing activities, notably the production of hydrated lime products, which has recently commenced.

• Capacity utilization is expected to increase progressively year by year. Failure to fully utilize capacity could adversely impact long-term profitability, business, and financial condition.

• The company has experienced negative net cash flows previously and may encounter them in the future.

• Legal proceedings involve the company, its directors, subsidiaries, promoters, and certain group companies.

• The company necessitates specific approvals and licenses as part of its regular operations and must adhere to regulatory requirements.

• The industry in which the company operates is fiercely competitive, potentially affecting its pricing capabilities and disrupting sales.

 

Shivam Chemicals IPO GMP Today

The Latest GMP of Shivam Chemicals Limited is Rs.2.

 

Shivam Chemicals Limited IPO timetable (Tentative)

Shivam Chemicals Limited IPO is scheduled from April 23 to April 25, 2024, with allotment on April 26, refund initiation on April 29, and listing on April 30, 2024.

Shivam Chemicals Limited IPO Details 

Shivam Chemicals Limited IPO, with a face value of Rs.10 per share, opens on April 23 and closes on April 25, 2024, offering 4,587,000 shares at Rs.44 per share, with a lot size of 3000 shares, aiming to raise Rs.20.18 Cr, and will be listed on BSE SME.

IPO opening & closing date	April 23, 2024 to April 25, 2024
Face value	Rs. 10 per share
Issue Price	Rs. 44 per share
Lot Size	3000 Shares
Price of 1 lot	Rs. 132,000
Issue Size	4,587,000 shares (aggregating up to ₹20.18 Cr)
Fresh issue	4,587,000 shares (aggregating up to ₹20.18 Cr)
Listing at	BSE SME
Issue Type	Fixed Price Issue IPO
Registrar	Cameo Corporate Services Limited

 

Shivam Chemicals Limited IPO Lot Details 

For Shivam Chemicals Limited IPO, the retail investor minimum and maximum lot investments are both 1 lot (3000 shares) at Rs.132,000 while for HNI investors, the minimum investment is 2 lots (6000 shares) at Rs.264,000.

Minimum Lot Investment (Retail)	1 lot
Maximum Lot Investment (Retail)	1 lot
Minimum Lot Investment (HNI)	2 lot

Shivam Chemicals Limited IPO Reservation

Other Investors share Portion	50%
Retail Investors share Portion	50%

Promoters and Management of Shivam Chemicals Limited

• Sanjiv Girdharlal Vasant

• Soham Sanjiv Vasant

• Shivam Sanjiv Vasant.

Pre-issue Promoter shareholding	99.99%
Post-issue Promoter shareholding	73.00%

 

Shivam Chemicals Limited IPO Lead Managers

• Aryaman Financial Services Limited 

Dividend Policy

The company has not declared any dividends in the past three financial years.

 

 

Conclusion

The company has a limited operating history and operates within a competitive industry. Additionally, its revenue has experienced a decline. Seasoned investors are encouraged to consider these factors thoroughly before applying for the upcoming IPO to maximize potential gains.

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.

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