Gandhar Oil Refinery India Ltd IPO

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Gandhar Oil is a leading manufacturer of white oils by revenue with a growing focus on the consumer and healthcare end-industries (Source: CRISIL Report). As of June 30, 2022, our product suite comprised over 350 products primarily across the personal care, healthcare and performance oils (“PHPO”), lubricants and process and insulating oils (“PIO”) divisions under the “Divyol” brand. Our products are used as ingredients by leading Indian and global companies for the manufacture of end products for the consumer, healthcare, automotive, industrial, power and tyre and rubber sectors.
They have completed rigorous selection processes for securing business from several of our customers and have been able to maintain high customer loyalty. Our customer engagement, relationships and the quality and other certifications awarded to our manufacturing facilities demonstrate the quality of our products and our capabilities.
Their relationships with our customers have contributed to our growth and performance in the last three Financial Years and according to the CRISIL Report, such long-term relationships with customers are one of the barriers to entry in our industry

Competitive Strengths –

(i) Leading market share of the Indian white oils market with significant overseas sales, focused on the consumer and healthcare end-industries
(ii) Extensive and diversified customer base and a supplier base comprised of leading oil companies with competitive pricing terms
(iii) Strategically located manufacturing facilities and in-house R&D capabilities
(iv) Resilient, flexible and scalable business model with prudent risk management framework
(v) Track record of consistent financial performance
(v) Experienced and qualified management team

Objects of the Gandhar Oil Refinery India Ltd IPO:

The Company proposes to utilize the Net Proceeds from the Fresh Issue towards funding the following objects: 1. Investment in Texol by way of a loan for financing the repayment/pre-payment of a loan facility availed by Texol from the Bank of Baroda 2. Capital expenditure through purchase of equipment and civil work required for (i) expansion in capacity of automotive oil at our Silvassa Plant (ii) expansion in capacity of petroleum jelly and accompanying cosmetic product division at our Taloja Plant (iii) expansion in capacity of white oils by installing blending tanks at our Taloja Plant 3. Funding working capital requirements of our Company 4. General corporate purposes. The Total number of shares are issues: - i) Fresh Issue is 17,869,822 shares, ii) Offer for Sale is 11,756,910 shares.
DRHP of Gandhar Oil Refinery India Ltd IPO
RHP of Gandhar Oil Refinery India Ltd IPO

Gandhar Oil Refinery India Ltd IPO Details:

Open Date: Nov 22 2023
Close Date: Nov 24 2023
Total Shares: 29,626,732
Face Value: ₹ 2 Per Equity Share
Issue Size: 500.69 Cr.
Lot Size: 88 Shares
Issue Price: ₹ 160 to ₹169 Per Equity Share
Listing At: NSE,BSE
Listing Date: Dec 04 2023

Promoters And Management:

Mr. Ramesh Babulal Parekh is the Promoter, Chairperson and Managing Director of the Company. He holds a bachelor’s degree in commerce from the University of Mumbai. He has been with the Company since its incorporation and has over 30 years of experience in the petroleum and specialty oils industry. He looks after the overall management and organisation of Company and also monitors the overall performance of Company. He also serves as a director on the board of Manufacturers of Petroleum Specialities Association. Additionally, he is also a director on the board of directors of other companies including Gandhar Shipping and Logistics Private Limited and Texol Lubritech FZC. Mr. Samir Ramesh Parekh is the Promoter, Vice Chairperson and Joint Managing Director of Company. He holds a bachelor’s degree in commerce from the University of Mumbai. He has over 19 years of experience in manufacturing and marketing of petroleum and specialty oils industry. He first joined the Company as a sales executive officer in 2003. He is responsible for managing the operations of the company's Silvassa manufacturing facility. Mr. Aslesh Ramesh Parekh is the Promoter and Joint Managing Director of Company. He holds a bachelor’s degree in science from the University of Mumbai and a post-graduate certificate in e-management and business administration from the MET Asian Management Development Centre. He has over 19 years of experience in the petroleum and specialty oils industry.

Financials of Gandhar Oil Refinery India Ltd IPO:

A. Balance Sheet
Particular (In Million) Mar-21 Mar-22 Mar-23
Equity Share Capital 160.00 160.00 160.00
Reserves 4,288.25 5,251.24 7,092.98
Borrowings 787 1,582 1,695
Trade Payables 5,232 5,173 5,673
Other Liabilities 542 1,016 1,514
Total Liabilities 6,561 7,771 8,881
Net Block 743 1,583 1,747
Capital Work in Progress 216 440 727
Investments 20 10 10
Other Assets 280 533 1,101
Total NC Assets 1,260 2,566 3,585
Receivables 5,142 4,420 5,618
Inventory 1,986 3,256 4,509
Cash & Bank 1,215 1,828 1,082
Other Assets 1,407 1,112 1,340
Face value 10 2 2
B. Profit & Loss Statement
Particular (In Million) Mar-21 Mar-22 Mar-23
Sales 22,210 35,434 40,794
Raw Material Cost 11,356 23,823 33,260
Purchases of Stock In Trade 7,464 6,764 2,146
Change in Inventory 517 -25 156
Employee Cost 238 366 524
Other Expenses 1,247 2,046 1,542
Other Income 216 256 224
EBITDA 1,604 2,716 3,390
EBITDA Margin 7.22% 7.66% 8.31%
Depreciation 114 151 165
Interest 358 317 515
Profit before tax 1,203 2,252 2,710
Tax 200 616 578
Net profit 1,003 1,636 2,132
NPM (%) 4.47% 4.58% 5.20%
C. Cash Flow Statement
Particular (In Million) Mar-21 Mar-22 Mar-23
Cash From Operating Activity
Profit From Operation 1,702 2,756 3,411
Receivable -730 735 -1,137
Inventory -138 -1,270 -1,252
Payable 436 -85 450
Other WC Items -79 94 186
Working Capital Changes -511 -525 -1,754
Direct Taxes -11 -564 -612
Net Cash Inflow from Operating Activity 1,181 1,667 1,044
Cash from Investing Activity
Fixed assets purchased -104 -1,156 -557
Investments purchased -1 0.4 0
Investment in group cos -71 71 0
Other investing items -47 -75 -178
Net cash inflow from investing activities -224 -1,160 -734
Cash from Financing Activity
Proceeds from borrowings 25 794 124
Repayment of borrowings -539 0 -11
Intrest paid fin -338 -292 -470
Dividends paid 0 -456 0
Financial liabilities -39 -62 -37
Other financing items -20 -25 -45
Net Cash Flow 46 466 -128
(Fig. in Crores)
Year Revenue EBITDA OPM PAT NPM Shares F.V. EPS NW RONW
2017 2256 126 6% 62.1 3% 1.6 10 38 321 19%
2018 2760 143 5% 64.44 2% 1.6 10 40 381 17%
2019 3594 97 3% 18.73 1% 1.6 10 12 384 5%
2020 2516 75 3% 11.7 0.40% 1.6 10 8 390 3%
2021 2236 142 6% 74 3% 1.6 10 46 463 16%
2022 3578 270 7.54% 164 4.50% 8 2 21 578 28%
2023 4101 339 8.26% 213 5.20% 8 2 22 760 28%
 

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Gandhar Oil Refinery (India) Limited 4079 213 21.78 7.8 169 1,654
Savita Oil Technologies Limited 3629 226 32.66 13.6 328 2,266
Apar Industries Limited 14,352 638 166.64 28.7 5,879 22,494
Panama Petrochem Limited 2,249 233 38.51 9.54 306 1,848
Galaxy Surfactants Limited 4,443 381 107.46 28.1 2,759 9,829
Privi Speciality Chemicals Limited 1,578 22 5.75 224 1,278 4,980
Rossari Biotech Limited 1,656 107 19.45 33.7 714 3,941
Fairchem Organics Limited 648 44 33.41 52.1 1,154 1,503
* All the data is as per FY23.

Lead Manager of Gandhar Oil Refinery India Ltd IPO:

  1. ICICI Securities Limited
  2. Nuvama Wealth Management Limited

Registrar of Gandhar Oil Refinery India Ltd IPO:

  1. Link Intime India Private Limited

Discussion on Gandhar Oil Refinery India Ltd IPO:

1 Comment

    Gandhar Oil Refinery has exhibited impressive growth in revenue and net profit in recent periods. In the first quarter of fiscal year 2024, the company recorded a revenue of Rs 1,070 crore along with a net profit of Rs 54 crore, showcasing significant year-on-year growth. Over the past two financial years, Gandhar Oil Refinery has achieved exceptional financial efficiency, with Return on Equity (RoE) and Return on Capital Employed (RoCE) figures surpassing 30% and 40%, respectively.

    In terms of market valuation, the company’s issue is priced at a Price to Book Value (P/BV) ratio of 1.67 times, based on its Net Asset Value (NAV) of Rs 101.35 as of June 30, 2023. When considering the upper price band, the P/BV ratio is adjusted to 1.49, factoring in the post-IPO NAV of Rs 113.70 per share.

    Furthermore, when evaluating the Price to Earnings (PE) ratio for Gandhar Oil, using the annualized FY24 earnings in relation to the post-IPO fully diluted paid-up equity capital, the PE ratio is calculated at an attractive 6. This is noteworthy, especially when compared to its peers such as Savita Oil Technologies, Apar Industries Ltd, Galaxy Surfactants, and Privi Speciality Chemicals, which have PE ratios of 11, 30, 24, and 222 respectively. This analysis positions Gandhar Oil Refinery’s issue as competitively priced and potentially appealing for investors.

    This financial summary highlights Gandhar Oil Refinery’s robust financial growth and the potential attractiveness of its market valuation in the context of its industry peers.

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