Hindcon Chemicals Limited IPO
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Objects of the Hindcon Chemicals Limited IPO:
1.To Meet Working Capital Requirement.
2.To meet General Corporate Expenses
3.To meet Issue Expenses
Hindcon Chemicals Limited IPO Details:
| Open Date: | Feb 26 2018 |
| Close Date: | Feb 28 2018 |
| Total Shares: | 2760000 |
| Face Value: | ₹ 10 Per Equity Share |
| Issue Type: | Fixed Issue |
| Issue Size: | 7.728 Cr. |
| Lot Size: | 4000 Shares |
| Issue Price: | ₹ 28 Per Equity Share |
| Listing At: | NSE Emerge |
| Listing Date: | Mar 09 2018 |
Promoters And Management:
1.Mr. Sanjay Goenka is the Managing Director and Promoter of the Company.
Completed his first year Bachelor of Commerce from University of Calcutta.
Joined the Company as Director in the year 1999. Over 25 years of experience in business of construction chemicals/cement additives. Has been awarded with “National Award – 2010” in the year 2011 from Ministry of Micro, Small & Medium Enterprises for Outstanding Entrepreneurship. A visionary entrepreneur who is well versed with construction chemicals industry.
2.Mrs. Nilima Goenka is the Executive Director and Promoter of the Company.
She has completed her matriculation in 1986.She is one of the subscribers of MOA and has been on company board since incorporation to 2012, and rejoined the Board as Executive Director from June’17. She has over 20 years of experience in Administration and HR Management. She is entrusted with the responsibility to oversee administration and HR functions.
Company Business:
The Company’s manufacturing facility is based at Howrah, West Bengal and Company primarily engaged in the manufacturing of construction chemicals such as Waterproofing additives, Plasticizers, Concreting Aids, Sealant Products etc., which finds their applications mainly in Construction Sector. Consequently, the business of the company is dependent on the performance of the construction and infrastructure industry.
The revenues are significantly dependent on sales of single product i.e. sodium silicate and over the years, such sales have emerged as the largest single contributor to companies revenue and business.
In F.Y. 2016-17, revenue from sale of sodium silicate accounted for 72.69% of total revenue for such year.
For the year ended March 31, 2017 Company’s top ten customers cumulatively accounted for approximately 61.05% of total revenue from operations as per restated financial statements.
Major Clientele (Top 10 clients )
| Name of the | Amount (` in Lacs) | Clients As % of total turnover |
| Jaiprakash Associates Limited | 421.06 | 12.40 |
| Bengal Traders Private Limited | 299.92 | 8.84 |
| Gammon India Limited | 261.65 | 7.71 |
| H. C. C Ltd. | 226.34 | 6.67 |
| Dinesh Chandra R Agarawal Infracon Pvt Ltd | 195.7 | 5.77 |
| Larsen & Toubro Limited | 169.49 | 4.99 |
| BGR Energy Systems Ltd. | 153.25 | 4.51 |
| Ashwin International Pvt Ltd | 139.6 | 4.11 |
| Chetak Enterprises Ltd | 118.24 | 3.48 |
| SSNR Projects Private Limited | 86.44 | 2.55 |
| Patel Engineering Limited | 52.32 | 1.54 |
| SEW Infrastructure limited | 7.74 | 0.23 |
| TOTAL | 2132.41 | 62.82% |
Capital Structure:
| Authorized Share Capital (1,10,00,000 Equity Shares @FV=10) | 1100 lakh |
| Issued, Subscribed,& Paid-up Share Capital Before Issue ( 74,78,125 Equity Shares @FV=10) | 747.81 lakh |
| Present Issue (27,60,000 Equity Shares@FV=10) | 276 lakh |
| Reservation for Market Maker (1,44,000 Equity Shares @FV=10) | 14.4 lakh |
| Net Issue to Public (27,60,000-1,44,000)= 26,16,000 | 261.60 lakh |
| Retail Quota(<2 Lkah) | 13,08,000 shares |
| HNI & QIB Quota(>2 Lakh) | 13,08,000 shares |
| Paid Up Capital after the issue | 1023.81 lakh |
| Sr.no | Name of the Promoter | No. of shares held | Average price of Acquisition |
| 1 | Mr. Sanjay Goenka | 15,22,500 | 2.69 |
| 2 | Mrs. Nilima Goenka | 13,28,500 | .97 |
Financials of Hindcon Chemicals Limited IPO:
1. Balance Sheet Snippet[ All Calculations are for FY 16-17]
(i) Shareholders’ Fund[Equity] Value =1525.53 Lakh
(ii) Asset= 2604.09 Lakh
(iii) Liability = 1078.56 Lakh
(iv) Debt/Equity =0.71
(v) RONW(%)= 14%
2. Profit n Loss Snippet[ All Calculations are upto Mar 17]
(i) Revenue of last 5 years is growing at approx. CAGR of 2.63%. The revenue is almost flat in the last 5 years.
(ii) PAT of last 5 years is growing at a CAGR of 64%(Excellent). The company has shown big spike in profit in the year ended March'17 on flat Topline is surprising.
(iii) Weighted EPS of last 3 years= 3.61
(iv) P/E=7.75(looks reasonably price) at the price of 28.
3. Cash Flow Statement
The company has slight hiccup in the year 2013 and 2015 where they have generated negative cash flows otherwise company has generated positive cash flow.
Comparison With Peers:
| Peers | FV | EPS | PE |
| Pidilite Industries Limited | 1 | 17.07 | 51.85 |
| BASF India Limited | 10 | 51.03 | 41.11 |
| Gillanders Arbuthnot & Company Limited | 10 | 2.36 | 31.78 |
| Hindcon Chemicals Limited2 | 10 | 5.46 | 10.17 |
Recommendation on Hindcon Chemicals Limited IPO:
Recommended.
Lead Manager of Hindcon Chemicals Limited IPO:
Registrar of Hindcon Chemicals Limited IPO:
Company Address:
Hindcon Chemicals Limited
62/B, Braunfeld Row,
1st Floor,
Kolkata
Phone: 033-24490835/39
Fax: +91-033-24490849
Email: contactus@hindcon.com,
Website: http://www.hindcon.com
Discussion on Hindcon Chemicals Limited IPO:
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