Nine things to know about Tatva Chintan Pharma Chem’s IPO

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The Rs 500 crore initial public offer (IPO) of Gujarat-based Tatva Chintan Pharma Chem is set to hit the street on July 16. Here are nine things that you should know about the IPO.

Open and close date: The offer will open for subscription on July 16 and the bidding will close on July 20. The anchor book, if any, will open for a day before the issue opening, i.e. July 15.

Price band: The price band for the pharma chemical company has been fixed at Rs 1,073-1,083 per share.

Lot size: Investors can bid for a minimum of 13 equity shares and in multiples, thereafter, translating to a minimum bidding amount of Rs 14,079 at the higher end of the price band. A retail investor can at max apply for 14 lots or 182 shares for Rs 1,97,106.

Issue size: The Rs 500-crore public offer comprises fresh issuance of equity shares of Rs 225 crore, and an offer for sale of Rs 275 crore by promoters and shareholders.

Objective of issue: The specialty chemical manufacturer will utilise its net proceeds from fresh issue for funding expansion of its Dahej manufacturing facility and up-gradation at its R&D facility in Vadodara.

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: Tatva Chintan Pharma Chem Limited is a chemical manufacturing company that manufactures structure-directing agents (SDAs), phase transfer catalyst (PTCs), pharmaceutical and agrochemical intermediates, and other specialty chemicals. It is among the largest manufacturer of SDAs for zeolites in India. As of March 2021, the company offered 47 products under its SDA product portfolio, 48 products under its PTC product portfolio, six products under its electrolyte salts for supercapacitor batteries portfolio and 51 products under its PASC portfolio.

Merck, Bayer AG, Ipox Chemicals, Laurus labs, Navin Fluorine International Limited, Atul Limited, Otsuka Chemicals, SRF Limited, Hawks Chemical Company, Firmenich Aromatics Prod Pvt Ltd, and Divi’s laboratories are a few of customers of the company. Currently, it has two manufacturing facilities at Ankleshwar and Dahej in Gujarat.

For the financial year ended March 31, 2021, the company reported total revenue of Rs 306.29 crore compared to Rs 206.8 crore in FY19. Its bottom line more than doubled in the last three financial years as it reported a profit after tax of Rs 52.26 crore in FY21 versus Rs 20.54 crore profit posted in FY19.

Book Running Lead Managers and Registrar to the IPO: The book running lead managers to the issue are ICICI Securities and JM Financial. The registrar to the issue is Link InTime.

Issue timeline: The issue is likely to finalize the basis of allotment by July 26, and the initialization of refunds will take place by July 27. While the credit of equity shares to depository accounts of the allottee will be done on July 28. The company is expected to make its stock market debut on July 29, 2021.