Kronox Lab Sciences Limited IPO

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They are a leading manufacturer of High Purity Specialty Fine Chemicals, catering to a wide array of end-user industries. Their portfolio includes over 185 products, including phosphate, sulfate, acetate, chloride, citrate, nitrates, nitrites, carbonate, EDTA derivatives, hydroxide, succinate, and gluconate, among others. Their products are distributed both domestically and internationally, reaching customers in India and over 20 countries globally.

Product Applications

Their High Purity Specialty Fine Chemicals are integral to numerous industries and applications:
i. Pharmaceutical Industry:
Active Pharmaceutical Ingredients (APIs): Their chemicals are used as reacting agents and raw materials in the manufacturing of APIs.
Excipients: They serve as excipients in pharmaceutical formulations, ensuring the stability and efficacy of drugs.

ii. Scientific Research and Laboratory Testing: Their chemicals are utilized as reagents, facilitating various scientific experiments and laboratory tests.

iii. Nutraceuticals: Their ingredients enhance nutraceutical formulations, contributing to health and wellness products.

iv. Biotechnology: They act as process intermediates and fermenting agents in biotech applications, supporting advancements in the field.

v. Agrochemicals: Their products are key ingredients in agrochemical formulations, aiding in agricultural productivity and crop protection.

vi. Personal Care: They supply ingredients for personal care products, ensuring quality and safety in skincare and cosmetic products.

vii. Metal Refining: Their chemicals function as refining agents in metal refineries, playing a crucial role in metal purification processes.

viii. Animal Health: Their ingredients are used in formulations for animal health products, promoting the well-being of livestock and pets.

Commitment to Innovation and Quality

Their commitment to product development, diversity in offerings, and adherence to quality standards has earned them repeat orders and long-standing relationships with their customers. Continuous process improvement and innovation are at the core of their operations, ensuring they remain at the forefront of the industry.

By focusing on these core areas, they aim to provide their customers with reliable, high-quality specialty chemicals that drive their success and growth.

Objects of the Kronox Lab Sciences Limited IPO:

The Objects of the Offer are to: i. Carry out the Offer for Sale of up to 95,70,000 Equity Shares by the Promoter Selling Shareholders; and ii. Achieve the benefits of listing the Equity Shares on the Stock Exchanges. Further, the Company expects that the proposed listing of the Equity Shares will enhance the visibility and brand image, provide liquidity to its existing Shareholders, and provide a public market for Equity Shares in India.
DRHP of Kronox Lab Sciences Limited IPO
RHP of Kronox Lab Sciences Limited IPO

Kronox Lab Sciences Limited IPO Details:

Open Date: Jun 03 2024
Close Date: Jun 05 2024
Total Shares: 9,570,000
Face Value: ₹ 10 Per Equity Share
Issue Size: 130.15 Cr.
Lot Size: 110 Shares
Issue Price: ₹ 129 - 136 Per Equity Share
Listing At: NSE,BSE
Listing Date: Jun 10 2024

Promoters And Management:

Jogindersingh Jaswal is one of the Promoters and is the Managing Director of the Company. He has been a director of the Company since incorporation. He holds a bachelor’s degree in science from Panjab University. Previously, he has worked with Ranbaxy Laboratories Limited and Ranbaxy Fine Chemicals Limited from the year 1994 till 2001. He has over three (3) decades of experience in chemical industry. He looks after production, quality control and human resource activities in the Company. Ketan Ramani is one of the Promoters and Whole-time Director of the Company. He has been a director of the Company since incorporation. He is a commerce graduate from M. S. University, Baroda and holds a degree for post-graduation in industrial purchasing and material management from the Maharaja Sayajirao University of Baroda. He has over three (3) decades of experience in the chemical industry. He oversees finance, purchase and administration in the Company. Pritesh Ramani is one of the Promoters and Whole-time Director of the Company. He has been a director of the Company since incorporation. He holds a bachelor’s degree in science from South Gujarat University. He has over two (2) decades of experience in the chemical industry. He looks after sales and marketing in the Company.

Financials of Kronox Lab Sciences Limited IPO:

A. Balance Sheet
Particular (In Million) Mar-21 Mar-22 Mar-23 9M-FY24
Equity Share Capital 2.41 2.41 371.04 371.04
Reserves 266 401 76 232
Borrowings 0.1 6 0 0
Trade Payables 66 115 78 57
Other Liabilities 43 43 15 10
Total Liabilities 376 568 540 670
Net Block 57 88 159 260
Capital Work in Progress 4 0 0 0.4
Investments 0.3 0.3 0.3 0.3
Other Assets 53 38 39 7
Total NC Assets 114 126 199 267
Receivables 154 258 186 170
Inventory 55 75 92 72
Cash & Bank 21 28 36 16
Other Assets 32 80 29 145
Face value 10 10 10 10
B. Profit & Loss Statement
Particular (In Million) Mar-21 Mar-22 Mar-23 9M-FY24
Sales 625 822 956 677
Cost of materials consumed 344 480 580 328
Change in Inventory 0 -6 -31 26
Employee Cost 54 57 70 50
Other Expenses 79 94 117 68
Other Income 8 11 19 8
EBITDA 156 208 239 212
EBITDA Margin 24.94% 25.28% 25.02% 31.34%
Depreciation 20 20 15 10
Interest 4 4 1 0
Profit before tax 132 184 223 202
Tax 35 47 57 47
Net profit 97 136 166 155
NPM (%) 15.39% 16.35% 17.04% 22.60%
C. Cash Flow Statement
Particular (In Million) Mar-21 Mar-22 Mar-23 9M-FY24
Cash From Operating Activity
Profit From Operation 154 207 235 210
Receivable 0.02 -104 73 16
Inventory -5 -20 -17 20
Payable -4 55 -37 -29
Other WC Items 3 -0.1 1 -13
Working Capital Changes -5 -69 20 -6
Direct Taxes 36 48 58 51
Net Cash Inflow from Operating Activity 113 90 197 153
Cash from Investing Activity
Fixed assets purchased -17 -38 -84 -111
Fixed assets sold 0.8 0.8 0.2 0
Other investing items -14 -39 29 -62
Net cash inflow from investing activities -30 -76 -55 -173
Cash from Financing Activity
Proceeds from borrowings -0.1 6 0 0
Intrest paid fin -4 -4 -1 0
Financial liabilities -8 -9 -8 0
Buy Back of Shares -59 0 -125 0
Other financing items 0 0 -0.01 0
Net Cash Flow 13 8 8 -20

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Kronox Lab Sciences Limited 96 17 4.47 30.4 136 505
Tatva Chintan Pharma Chem Limited 424 45 20.52 83.7 1087 2,539
Tanfac Industries Limited 375 56 56.27 37.6 1,980 1,975
Neogen Chemicals Limited 686 50 20.04 112.0 1,512 3,991
Sigachi Industries Limited 302 44 1.42 36.1 63.8 2,062
DMCC Speciality Chemical Limited 385 7 2.75 65.9 305 763
All the data is as per FY23. Note:- i. There are no listed companies in India that are engaged in a business similar to this Company. ii. They have provided the above information for broad based comparison since there are no companies having exact product segment matching with the Company.

Recommendation on Kronox Lab Sciences Limited IPO:

1. They are a leading manufacturer of High Purity Speciality Fine Chemicals, catering to a diverse range of end-user industries. Their chemicals are integral in various applications, including pharmaceuticals, nutraceuticals, biotechnology, agrochemicals, personal care, metal refining, and animal health products. Their commitment to quality, innovation, and customer satisfaction has established them as a trusted supplier both domestically and internationally. 2. Product Applications Their High Purity Speciality Fine Chemicals serve numerous critical functions across various industries: i. Pharmaceuticals: a) Active Pharmaceutical Ingredients (APIs)                     b) Excipients ii. Scientific Research and Testing iii. Nutraceuticals iv. Biotechnology v. Agrochemicals vi. Personal Care vii. Metal Refining viii. Animal Health Their products comply with stringent industry standards such as IP, BP, EP, JP, USP, FCC, LR, AR, GR, and ACS. Additionally, they offer custom manufacturing to meet specific customer requirements, ensuring flexibility and customer satisfaction. 3. Product Range They manufacture over 185 products, covering a wide array of chemical families including phosphate, sulphate, acetate, chloride, citrate, nitrates, nitrites, carbonate, EDTA derivatives, hydroxide, succinate, and gluconate. These products are available in various grades and particle sizes ranging from 10 mesh to 100 mesh, ensuring versatility in their applications. 4. Global Footprint and Export Growth They have significantly expanded their global presence, exporting products to over 20 countries including the United States, Argentina, Mexico, Australia, Egypt, Spain, Turkey, United Kingdom, Belgium, United Arab Emirates, and China. Their export revenue has shown robust growth, with a Compound Annual Growth Rate (CAGR) of 37.46% between Fiscal 2021 and 2023. 5. Competitive Landscape Their competitive environment varies by market and product type. They compete on product quality, technology, cost, delivery, and service, as well as senior-level relationships. Their primary competitors include domestic and international companies such as Canton Laboratories Private Limited (India), Jost Chemicals (USA), Budenheim (Germany), Jiangsu Kolod Food Ingredients Co. Ltd. (China), CFL Chemische Fabrik Lehrte GmbH & Co. KG (Germany), and Ichimaru Co. Ltd. (Japan). 6. The Revenue has Increased from Rs.62 Crores in FY21 to Rs.95 Crores in FY23. 7. The EBITDA has Increased from 15 Crores in FY21 to 24 Crores in FY23. 8. The PAT has Increased from 10 Crores in FY21 to 16 Crores in FY23. 9. As per FY23, CFO/EBITDA is 0.98, As per FY24, EPS is 5.55, 10. Market Capitalization is 505 Crore & P/E is 24.46x based on FY24.

Lead Manager of Kronox Lab Sciences Limited IPO:

  1. Pantomath Capital Advisors Private Limited

Registrar of Kronox Lab Sciences Limited IPO:

  1. Kfin Technology Private Limited

Company Address:

Kronox Lab Sciences Limited Block No. 353, Village Ekalbara, Padra, Vadodara-391440 Phone: +91 26 6224 4077/88 Email: cs@kronoxlabsciences.com Website: https://www.kronoxlabsciences.com/

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