Petro Carbon and Chemicals Limited IPO

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Petro Carbon and Chemicals Limited (“PCCL”) is part of the ATHA Group, a diversified Indian business conglomerate headquartered in Kolkata with a history spanning over 70 years. Founded by Mr. Kishor Kumar Atha in 1957 in Odisha as a mining and minerals company, the ATHA Group has expanded its portfolio through strategic diversification, forward and backward integrations, and acquisitions. PCCL, a key entity within this group, focuses on the manufacturing and marketing of Calcined Petroleum Coke (CPC) in the carbon industry.

Business Model and Market

PCCL operates a B2B business model, supplying CPC primarily to aluminum manufacturing government companies, graphite electrode producers, titanium dioxide manufacturers, and other users in the metallurgical, chemical, and steel industries. The company’s high-quality products and reliable services have earned it prestigious recognitions, including the NALCO VIKRETA UTKARSH PURASKAR in 2018 for being the top supplier among all suppliers of POL (Petroleum, Oil, and Lubricants) by the National Aluminium Company Limited.

Applications

CPC is crucial for the aluminum industry and is also utilized in the production of steel and various other carbon-based products. Its applications extend to:

i. Aluminum Industry: Used in the smelting process to produce aluminum.
ii. Titanium Dioxide Industry: Used in the production of titanium dioxide.
iii. Electrode Manufacturing: Utilized in the production of graphite electrodes.
iv. Foundry Industry
v. Glass Industry
vi. Metallurgical and Chemical Industry
vii. Steel Industry
viii. Carbon Paste Production

Conclusion

Petro Carbon and Chemicals Limited (PCCL) stands as a pivotal player in the carbon industry, leveraging the strengths and strategic direction of the ATHA Group. With a strong focus on technological advancements, quality products, and strategic market positioning, PCCL is well-equipped to continue its growth trajectory and maintain its status as a trusted supplier in the carbon industry. The company’s commitment to innovation, quality, and strategic expansion underscores its mission to deliver superior products and services to its diverse clientele across various industries.

Objects of the Petro Carbon and Chemicals Limited IPO:

The objectives of the Offer are to: i. Achieve the benefits of listing the Equity Shares on the Stock Exchanges; and ii. Carry out the Offer for Sale of up to Equity Shares by the Selling Shareholders. Total number of share are issue :- i. Offer for Sale is 6,617,600 shares.
DRHP of Petro Carbon and Chemicals Limited IPO
RHP of Petro Carbon and Chemicals Limited IPO

Petro Carbon and Chemicals Limited IPO Details:

Open Date: Jun 25 2024
Close Date: Jun 27 2024
Total Shares: 6,617,600
Face Value: ₹ 10 Per Equity Share
Issue Size: 113.16 Cr.
Lot Size: 800 Shares
Issue Price: ₹ 162 - 171 Per Equity Share
Listing At: NSE Emerge
Listing Date: Jul 02 2024

Promoters And Management:

Mr. Kishor Kumar Atha aged 77 years, is the one of the promoters of the Company. He holds Degree of Bachelor of Commerce He has more than 6 Decades of specialized experience in Calcined Petroleum Coke, Iron Ore Mining, Renewable Energy Power and Steel industry. Mr. Dilip Kumar Atha aged 74 years, is the one of the promoters of the Company. He is the qualified Chartered Accountant and member of the Institute of Chartered Accountants of India. He has more than 4 Decades of specialized experience in Finance, Calcined Petroleum Coke, Iron Ore Mining, Renewable Energy Power and Steel industry. Mr. Gaurav Atha aged 41 years, is the one of the promoters of the Company. He holds Degree of Bachelor of Commerce from University of Mumbai in March 2004 and also completed Owner/ President Management Program from the Harvard Business School. He has more than 20 years of specialized experience in Calcined Petroleum Coke, Iron Ore Mining, Renewable Energy Power and Steel industry.

Financials of Petro Carbon and Chemicals Limited IPO:

Particulars ( In Lakhs )
2021
2022
2023
9M-FY24
Revenue from Operations 15,200 27,697 51,551 44,570
Other Income 328 296 210 141
Total Revenue 15,529 27,993 51,761 44,711
Cost of Material Consumed 13,295 22,814 48,443 30,311
Change in Inventories -637 596 -3,519 427
Employees Benefit Expenses 258 313 446 423
Other Expenses 2,128 2,643 3,764 2,750
EBITDA 483 1,627 2,626 10,799
OPM (%) 3.11% 5.81% 5.07% 24.15%
Depreciation & Amortisation 62 108 178 155
EBIT 421 1,519 2,448 10,644
Finance Cost 392 687 1,499 609
PBT 29 805 950 10,035
Tax 17 234 277 3,004
PAT 12 571 672 7,031
NPM (%) 0.07% 2.04% 1.30% 15.73%
No.of Shares 247.00 247.00 247.00 247.00
EPS 0.04 2.31 2.72 28.46

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Petro Carbon and Chemicals Limited 516 7 2.72 62.8 171 422
Goa Carbon Limited 1,364 81 88.24 8.9 834 764
* All the data is as per FY23.

Recommendation on Petro Carbon and Chemicals Limited IPO:

Review and Recommendation of Petro Carbon and Chemicals by team IZ is 3/10. 1. Petro Carbon and Chemicals Limited (PCCL) is part of the ATHA Group, a diversified Indian business conglomerate with a 70-year history. PCCL specializes in the manufacturing and marketing of Calcined Petroleum Coke (CPC), serving a wide range of industries including aluminum manufacturing, graphite electrodes, titanium dioxide production, metallurgical, chemical, and steel industries. 2. The company's business model is fundamentally B2B, supplying CPC primarily to major government aluminum manufacturers and other key players in various industries. 3. Product and Production Process Calcined Petroleum Coke (CPC) is produced from Raw Petroleum Coke (RPC), also known as Green Petroleum Coke. The calcining process converts green coke into hard, dense, and almost pure carbon with low hydrogen content and good electrical conductivity. These properties, along with low metal and ash content, make CPC the best material for making carbon anodes used in the electrolytic smelting process for aluminum production. CPC is crucial in the manufacturing of aluminum and is also used in the production of steel and various other carbon-based products. Its applications span across industries such as aluminum, titanium dioxide, electrode manufacturing, foundry, glass, metallurgical, chemical, and steel. 4. Competition and Market Position The CPC market is competitive, with several Indian companies producing similar products. Key competitors include Rain Commodities Limited and Goa Carbon Limited. Despite the competition, PCCL maintains a competitive edge through its environment-friendly and cost-effective CPC manufacturing processes, coupled with high managerial competency. The company's plant has been operating at 80% to 90% capacity for the last three years, with orders consistently in place. 5. The Revenue has Increased from Rs.152 Crores in FY21 to Rs.515 Crores in FY23. 6. The EBITDA has Increased from 5 Crores in FY21 to 26 Crores in FY23. 7. The PAT has Increased from 12 Lakhs in FY21 to 6 Crore in FY23. 8. As per FY23, CFO/EBITDA is 1.41, As per FY24, EPS is 37.95, 9. Market Capitalization is 422 Crores & P/E is 4.5x based on FY24.

Lead Manager of Petro Carbon and Chemicals Limited IPO:

  1. GYR CAPITAL ADVISORS PRIVATE LIMITED

Registrar of Petro Carbon and Chemicals Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Petro Carbon and Chemicals Limited Avani Signature, 6th Floor, 91A/1, Park Street, Kolkata - 700016 Phone: 033-40118400 Email: pccl@athagroup.in Website: http://www.pccl.in/

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