9 things to know about Sigachi IPO

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Hyderabad-based manufacturer of cellulose-based excipients an ingredient that is used by pharmaceutical, food, nutraceuticals, and cosmetic industries, Sigachi Industries is all set to raise Rs 125.43 crore through its initial public offering (IPO). Here is the price band, lot size and other details for the issue

Open and close date: The offer will open for subscription on November 01 and the bidding will close on November 03. The anchor book, if any, will open for a day before the issue, i.e. October 31.

Price band: The price band for the ingredient manufacturer has been fixed at Rs 161 – 163 per share having a face value of Rs 10 per share.

Lot size: Investors can bid for a minimum of 90 equity shares and in multiples, thereafter, translating to a minimum bidding amount of Rs 14,670 at the higher end of the price band. A retail investor can at max apply for 13 lots or 1,170 shares for Rs 1,90,710.

Issue size: The Rs 125.43-crore public offer comprises fresh issuance of 7.70 million equity shares up from earlier planned of up to 2.84 million shares.

Objective of issue: Hyderabad-based company will utilise net proceeds for capacity expansion and for general corporate purposes.

What’s in it for retail investors: Not more than 50% of the total offer has been reserved for qualified institutional buyers, up to 35% for retail investors, and the rest 15% for non-institutional buyers.

About the company: Sigachi Industries is engaged in manufacturing of Microcrystalline Cellulose (MCC) which is widely used as an excipient for finished dosages in the pharmaceutical industry. MCC has varied applications in the pharmaceutical, food, nutraceuticals, and cosmetic industries. The company manufactures MCC of various grades ranging from 15 microns to 250 microns and the major grades of MCC manufactured and marketed by the company are branded as HiCel and AceCel.

The company has received various quality certifications and operates 3 manufacturing units namely, Unit I situated at Hyderabad, and two manufacturing units, Unit II and Unit III situated at Jhagadia and Dahej, in Gujarat. As of March 31, 2021, company’s total MCC manufacturing capacity is 13,128 MTPA from three locations.

On the financial front, the company’s net profit jumped to Rs 30.26 crore for the year ended FY21 compared to Rs 19.01 crore in FY19. Whereas it’s total revenues rose to Rs 196.01 crore versus Rs 132.87 crore during the same period. For the quarter ended June 2021 the company posted a profit of Rs 8.9 on a revenue of Rs 55.12 crore.

Book running lead managers and registrar to the IPO: Unistone Capital is the book running lead managers to the issue. The registrar to the issue is Bigshare Services.

Issue timeline: The issue is likely to finalize the basis of allotment by November 10, and the initialization of refunds will take place by November 11. While the credit of equity shares to depository accounts of the allottee will be done on November 12. The fintech company is expected to make its stock market debut on November 15, 2021.