Tatva Chintan Pharma IPO : Should you subscribe?

Tatva Chintan IPO

The Tatva Chintan Pharma IPO opens for subscription on 16th July 2020.

What is Tatva Chintan?

Tatva Chintan Pharma Chem Ltd. is a speciality chemicals manufacturing company. It is the largest and only commercial manufacturer of structure-directing agents (SDAs) for zeolites in India. It also enjoys the second-largest position globally. Along with SDAs, the company is also engaged in the manufacture of phase transfer catalysts (PTCs), pharmaceutical and agrochemical intermediates, and other speciality chemicals which have applications across various industries such as the automotive, petroleum, pharmaceutical, agrochemicals, paints and coatings, dyes and pigments, personal care and flavour and fragrances industries.

Apart from India, the company also exports its products to over 25 countries, including the USA, China, Germany, Japan, South Africa, and the UK. During the Fiscals ended March 31, 2021, exports of products amounted to 70.58% of the company’s revenue. Also read Money lessons from Monopoly

Tatva Chintan IPO details

Size of IPO : ₹500 crores (₹225 crore public issue; ₹275 crores offer for sale)

Subscription dates : 16th July to 20th July 2020

Price Band : ₹1073 to ₹1083

Lot Size : 13 shares per lot

Value of 1 lot : ₹14,079 at the upper price band of ₹1083

Maximum lots per person : A retail investor can apply for 14 lots. This would cost ₹197,106

What do experts say about the Tatva Chintan IPO?

“The company earns 30% of revenue from pharmaceutical and agrochemical intermediates and other specialty chemicals, which are basically export orders shifted from China to India. With its superior product mix, established brand name, forward integration, strong relationships with multinationals, and adding capacities, we believe Tatva Chintan is likely to deliver healthy financial performance,” – Investmentz

India’s specialty chemical companies are gaining favour with global multinationals because of the geopolitical shift after the outbreak of covid-19 as the world looks to reduce dependence on China. Currently, China accounts for approximately 15-17% of the world’s exportable specialty chemicals, whereas India accounts for just 1-2%, indicating that the country has a large scope of improvement and widespread opportunity. It is anticipated that specialty chemicals will be the next great export pillar for India,” – Sharekhan

Financials

The revenue of the company has grown to ₹306 crores in March 2021 from ₹206 crores in 2019. The profit after tax has already increased to ₹52 crores in March 2021 from ₹20.5 crores in 2019.

Verdict

Several analysts have issued a SUBSCRIBE rating to the IPO considering the strong financials and the uniqueness of the industry. Moderate listing gains can be expected.

You can apply for the Tatva Chintan IPO here.

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