Insights
About Citichem India Limited
Citichem India Limited incorporated in 1992, is one of the trusted sources of organic inorganic chemicals, bulk drugs and food chemicals which it supplies mainly to the pharmaceutical industry. The company’s operations extend to diverse sectors, including:
- Aluminum
- Steel
- Textiles
- Dairy
- Pharmaceuticals
- Adhesives
| Period | Assets (₹ in Lakhs) | Revenue (₹ in Lakhs) | Profit (₹ in Lakhs) | Net Worth (₹ in Lakhs) | Reserves (₹ in Lakhs) | Borrowing (₹ in Lakhs) |
|---|---|---|---|---|---|---|
| Jun-24 | 6,852 | 149 | 20 | 745 | 245 | 108 |
| Mar-24 | 6,933 | 1,961 | 112 | 725 | 225 | 108 |
| Mar-23 | 7,973 | 2,094 | 36 | 613 | 113 | 110 |
| Mar-22 | 9,143 | 8,528 | 24 | 577 | 77 | 111 |
Key Business Divisions
1.Specialty Chemicals and APIs:
A specialty chemical and API supply and outsourcing company serving the domestic and international markets.
2.Food Chemicals:
Supplying the food preservatives and the chemicals, under its brand so packaging and distribution.
3.Laboratory Chemicals:
A one-stop solution for any types of lab chemical needs.
Competitive Advantages
- Experienced Leadership: Arif Esmail Merchant is one of the hoi poloi, lending decades of experience.
- Strategic Location: The company is based in Mumbai and is somewhere the company is close to the important industrial hubs.
- Quality Assurance: Realisation of WHO GMP and other standards of quality.
IPO Details
1.Issue Type: Fixed Price Issue IPO
- A fixed price IPO dictates that the company puts a fixed price to the shares that all investors can subscribe to. It guarantees transparency, but may detract from investor flexibility relative to a book built issue.
2.IPO Price: ₹70 per share
3.Face Value: ₹10 per share
4.Lot Size: Minimum of 2,000 shares
- Investors must apply for shares in multiples of 2,000, making the minimum investment ₹1,40,000 for retail investors.
5.Listing Platform: BSE SME
Important Dates
| Event | Date |
|---|---|
| IPO Opens | December 27, 2024 |
| IPO Closes | December 31, 2024 |
| Allotment Finalization | January 1, 2025 |
| Refunds Initiated | January 2, 2025 |
| Shares Credited to Demat | January 2, 2025 |
| Listing Date | January 3, 2025 |
Subscription Details
| Investor Category | Shares Offered | Subscription (Times) |
|---|---|---|
| Retail Investors | 8,54,000 | 44.63 |
| HNIs | 8,54,000 | 8.19 |
| Total | 18,00,000 | 26.42 |
Financial Performance
| Metric | FY22 (₹ Lakhs) | FY23 (₹ Lakhs) | FY24 (₹ Lakhs) |
|---|---|---|---|
| Revenue | 8,528 | 2,094.07 | 1,960.58 |
| Profit After Tax | 23.94 | 36.26 | 111.83 |
| Assets | 9,142.69 | 7,972.53 | 6,932.79 |
| Net Worth | 577.01 | 613.27 | 725.11 |
Key Ratios
- Return on Equity (ROE): 15.42%
- Debt-to-Equity Ratio: 0.15
- PAT Margin: 5.70%
Industry Landscape
India’s economic growth depends on chemicals and pharmaceutical industries. Key drivers include:
- Global Speciality Chemicals Market: 6.4% CAGR (2024-2030).
- Indian Pharmaceutical Market: Reaches $130 by 2030.
- Government Initiatives: ‘Atmanirbhar Bharat’ and ‘Make in India’ are helping local manufacturing grow.
These trends are also in line with its niche segments focus such as APIs, making Citichem India a great bet for its growth.
- Scalable Business Model: Provides ability to meet global demand for speciality chemicals.
- Diverse Portfolio: Applications to products in several industries.
- Customer Loyalty: Repeat business is based on strong relationships.
- Revenue Decline: But there's a big worry about sharp, recent years, the revenues.
- Geopolitical Risks: It is also possible that raw material procurement in raw material trading of manufacturer import and export ITS will be affected by increasing international trade tensions.
- Workforce Limitations: Scalability can be impeded by a small team of just nine employees.
Grey Market Premium (GMP) roundtable.
The GMP for all the lots of the GMP shows that GMP for Citichem India IPO stands at +30, which implies a price level of rupees 100 per share, a 42.86% premium over the issue price. GMP, however, does not guarantee post listing performance.
Use of IPO Proceeds
The net proceeds from the IPO will be utilized for:
- Acquisition of property.
- Purchase of transportation vehicles.
- General corporate purposes.
- Covering IPO-related expenses
Conclusion
The opportunities for investment in the growing chemicals and pharmaceutical sectors make the Citichem India IPO an attractive investment for first time investors. Citichem enjoys experienced leadership, a strategic business model and favorable industry trends, and is well placed to grow. Investment, however, is not advisable unless such risks, including revenue volatility and operational constraints, are carefully weighed. If you are looking for a long term value in high growth sectors, Citichem India IPO could be an important addition to your portfolio.
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