Chemcon Speciality Chemicals IPO
(i) They are an ISO 9001:2015 and ISO 14001:2015 certified company for the “Manufacture and supply of pharmaceutical intermediates, silanes, and oilfield chemicals. Chemcon Speciality is a manufacturer of specialized chemicals, such as HMDS and CMIC which are predominantly used in the pharmaceutical industry, and inorganic bromide, namely Calcium Bromide, Zinc Bromide, and Sodium Bromide, which are predominantly used as completion fluids in the oilfields industry.
(ii) As per Frost & Sullivan Report, they were the only manufacturer of HMDS in India and were the third-largest manufacturer of HMDS worldwide in terms of production in the calendar year 2019. They were the largest manufacturer of CMIC in India and the second-largest manufacturer of CMIC worldwide, in terms of production and capacity in the calendar year 2019. Further, they were the only manufacturer of Zinc Bromide and the largest manufacturer of Calcium Bromide in India, in terms of production in the calendar year 2019.
(iii) They have customers in the Domestic and as well as in the export market. The export market consists of products to countries including the United States of America, Italy, South Korea, Germany, the People’s Republic of China, Japan, the United Arab Emirates, Serbia, Russia, Spain, Thailand, and Malaysia. In Fiscals 2020, 2019, and 2018, the revenue from exports was 39.78%, 31.99%, and 47.84%, respectively of the total revenue from operations and the CAGR growth is 17%.
(iv) The key customers of Chemcon are Pharmaceutical Chemicals include Hetero Labs Limited, Laurus Labs Limited, Aurobindo Pharma Limited, Sanjay Chemicals (India) Private Limited, Lantech Pharmaceuticals Limited, Ind -Swift Laboratories Limited, Vivin Drugs & Pharmaceuticals Limited, and Macleods Pharmaceuticals Limited and the key customers of our Oilwell Completion Chemicals include Shree Radha Overseas, Water Systems Specialty Chemical DMCC, and CC Gran Limited Liability Company.
(v) The manufacturing facility is located at Manjusar near Vadodara in Gujarat.
The company produces chemicals for the Pharmaceuticals industry, so their manufacturing facility was only temporarily shut during the pandemic from March 24, 2020, till March 31, 2020. They resumed manufacturing the Pharmaceutical Chemicals on April 1, 2020.
However, the raw materials for making these chemicals are procured from the local and global markets. So initially they face issues in getting raw materials but the problem is sorted now as the Govt has opened the economy.
1. Pharma Chemicals contribute around 63% in FY19-20.
Pharma Sector is really doing good, so this segment will perform well.
2. Oilwell Completion Chemicals contribute 37% in FY19-20.
The commercial success of the Oilwell Completion Chemicals is dependent upon the level of oil and gas exploration, development, and production activities. The oil and gas exploration and production industry is historically a cyclical industry characterized by significant changes in the levels of exploration and development activities.
According to Frost & Sullivan, the oil and gas industry is experiencing its third price collapse in a decade and globally there is wide-scale destruction of demand associated with COVID-19. Global level travel bans and grounding of international flights has resulted in a substantial reduction in consumption of aviation turbine fuel across the globe and demand for fuels except for LPG and domestic natural gas has also recorded a tremendous drop.
The reduced demand for oil and gas in Fiscal 2021 has resulted in reduced demand for Oilwell Completion Chemicals.
Objects of the Chemcon Speciality Chemicals IPO:
Chemcon Speciality Chemicals IPO Details:
|Open Date:||Sep 21 2020|
|Close Date:||Sep 23 2020|
|Face Value:||₹ 10 Per Equity Share|
|Issue Type:||Book Building|
|Issue Size:||318 Cr.|
|Lot Size:||44 Shares|
|Issue Price:||₹ 338-340 Per Equity Share|
|Listing Date:||Oct 01 2020|
Promoters And Management:
Financials of Chemcon Speciality Chemicals IPO:
|Change in Inventory||-44||-98||-20|
|Profit before tax||435||612||626|
|EPS in Rs||8.03||11.77||12.72|