Clean Science IPO

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(i) Clean Science and Technology Limited is among the few companies globally-focused entirely on developing newer technologies using in-house catalytic processes, which are eco-friendly and cost-competitive. It manufactures functionally critical specialty chemicals such as Performance Chemicals (i.e. MEHQ, BHA, and AP), Pharmaceutical Intermediates (i.e. Guaiacol and DCC), and FMCG Chemicals (i.e. 4-MAP and Anisole).

Raw materials used for producing above chemicals are phenol, hydrogen peroxide, acetic anhydride, tertiary butyl alcohol, acetone, methanol, and cyclohexylamine. Out of total raw material 7% is imported . Most of the raw material are derivatives of crude oil. Source from India, China and US.

(ii) Within 17 years of incorporation, the company has grown to be the largest manufacturer globally of MEHQ, BHA, Anisole, and 4-MAP, in terms of manufacturing capacities as of 2020.

(iii) Its customers include manufacturers and distributors in India as well as other regulated international markets including China, Europe, the United States of America, Taiwan, Korea, and Japan.

(iv) It has two certified production facilities in India strategically located at Kurkumbh (Maharashtra). It is also in the process of setting up a third facility adjacent to its existing facilities at Kurkumbh (Maharashtra), and in also discussion with the authorities for acquiring land for the fourth facility.

Competitive strengths
(i) Experienced Promoters and senior management
(ii) Strong and long-standing relationships with key customers
(iii) Automated manufacturing facilities.

Objects of the Clean Science IPO:

The object of the Offer is (i) To carry out the OFS of Equity Shares by the Selling Shareholders to raise 1546cr.
DRHP of Clean Science IPO
RHP of Clean Science IPO

Clean Science IPO Details:

Open Date: Jul 07 2021
Close Date: Jul 09 2021
Total Shares: 17177778
Face Value: ₹ 1 Per Equity Share
Issue Type: Book Building
Issue Size: 1546 Cr.
Lot Size: 16 Shares
Issue Price: ₹ 880 - 900 Per Equity Share
Listing At: NSE,BSE
Listing Date: Jul 19 2021

Promoters And Management:

(i) Pradeep Ramwilas Rathi, is the Chairman and Non-Executive Director of the Company. He holds a bachelor’s degree in science from the University of Poona and a master’s degree of science in chemical engineering practice from the Massachusetts Institute of Technology, USA. He also holds a master’s degree in business administration from Columbia University, USA. He has close to 25 years of experience in the chemical industry and is currently a director of Sudarshan Chemical Industries Limited, Pune, India. (ii) Ashok Ramnarayan Boob, is the Managing Director of the Company. He holds a bachelor’s degree in chemical engineering from the Institute of Chemical Technology, Mumbai. He has close to 25 years of experience in the chemical industry and has previously worked as an executive director at Mangalam Drugs and Organics Limited. (iii) Siddhartha Ashok Sikchi, is a Wholetime Director of the Company. He holds a master’s degree in science from the University of Manitoba, Canada, and a bachelor’s degree in technology from the Institute of Chemical Technology, Mumbai. He has over fourteen years of experience in the chemical industry. (iv) Krishnakumar Ramnarayan Boob, is a Wholetime Director of the Company. He holds a bachelor's degree in pharmacy from the University of Bombay, India. He has close to two decades of experience in the chemical industry and has previously worked as a director at Mangalam Drugs and Organics Limited.

Financials of Clean Science IPO:

Particulars (in Million) Mar-21 Mar-20 Mar-19
Revenue 5124 4193 3932
Cost of materials consumed 1378 1279 1786
Changes in inventories -142 12 -73
Employee benefits expenses 435 310 248
Other expenses 863 737 608
OPM 2590 1855 1363
OPM% 50.55% 44.24% 34.66%
Other Income 256 108 112
Finance costs 0.91 0.06 1.21
Depreciation 172 137 110
Profit before tax 2673 1823 1365
Total tax expenses 689 426 388
Profit After tax 1983 1396 976
EPS 18.68 13.15 9.19

Comparison With Peers:

Peer Sales 3-year Revenue Growth 3-year PAT Growth OPM (FY21) D/E ROE  (FY21) ROCE(FY21) Receivables days P/E
SRF Limited 8400 8.77% 36.60% 26% 0.44x 20% 18% 55 36
PI Industries Limited 4577 27% 34% 22% 0.05x 19% 22% 56 60
Atul Limited 3731 -3.88% 23% 25% 0.03x 18% 25% 72 40
Camlin Fine Sciences Limited 1187 15.36% 614% 16% 0.92x 9% 14% 83 49
Navin Flourine International Limited 1179 8.80% 31.59% 26% 0 16% 22% 88 75
Fine Organic Industries Limited 1133 3.39% -6.07% 18% 0.08x 16% 22% 52 73
Vinati Organics Limited 954 -8.04% -2.33% 37% 0 17.40% 24% 106 77
Clean Sciences 512 14% 21% 51% 0 37% 50% 53 48

Recommendation on Clean Science IPO:

Review and Recommendation of Clean Sciences IPO by IZ team is 6/10. (i) They have developed vapour-phase tech to produce anisole and have developed certain other methods to produce chemicals, which is cost effective. Clean sciences is the most cost-competitive producer of critical products, demonstrated by their significant exports to China. And, having highest margins in the industry. (ii) Experienced Promoters and senior management with extensive domain knowledge. Ashok Ramnarayan Boob and Siddhartha Ashok Sikchi, are alumni of the Institute of Chemical Technology and have combined experience of 35+ years in chemicals industry. Padmashri Professor Ganapati Dadasaheb Yadav, NonExecutive, Independent Director. (iii) Strong and long-standing relationships with key customers. (iv) IPO is coming at P/E of 48, while industry P/E is 60. So, lot of room is left for investors to earn money. (v) EBITDA Margins, PAT Margins and ROE and ROCE are highest in the industry. (vi) Good chances of listing gain above 30%.

Lead Manager of Clean Science IPO:

  1. Axis Capital Limited
  2. JM Financial Consultants Private Limited
  3. Kotak Mahindra Capital Company Limited

Registrar of Clean Science IPO:

  1. Link Intime India Private Limited

Company Address:

Office No. 503, Pentagon Tower P-4, Magarpatta City, Hadapsar, Pune 411 013 Maharashtra, India

Discussion on Clean Science IPO:

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