The Rs 500-crore initial public offering (IPO) of Tatva Chintan Pharma Chem opens for public subscription today. This is the fourth specialty company to launch its IPO in 2021.

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The company, on July 15 has raised Rs 149.99 crore from 22 anchor investors ahead of IPO opening. In consultation with merchant bankers, it finalised the allocation of 13,85,040 equity shares to anchor investors, at Rs 1,083 per equity share.

The IPO share allotment is expected to be finalised around July 26, and the funds will be refunded or unblocked from ASBA (Application supported by blocked amount) account around July 27, 2021. Equity shares issued will be credited to demat accounts of eligible investors around July 28, and shares are likely to be listed on bourses on July 29.

Here are key things to know about the public issue and the company:

The offer opens for subscription on July 16 and will close on July 20.

The price band for the issue is Rs 1,073-Rs 1,083 per equity share.

The IPO size is Rs 500 crore and comprises a fresh issue of shares worth Rs 225 crore and an offer for sale of shares up to Rs 275 crore by existing selling shareholders.

The market lot size is 13 shares and a retail-individual investor can apply for up to 14 lots (182 shares or Rs 197,106 at the higher price band).

The company has reserved up to 50 percent of the total offer for qualified institutional buyers, 15 percent for non-institutional bidders, and 35 percent for retail individual bidders.

The fresh issue proceeds will be utilised for funding capital expenditure requirements for expansion of Dahej manufacturing facility; upgradation of an R&D facility in Vadodara; and general corporate purposes.

About Company

Tatva Chintan Pharma Chem manufactures a wide range of structure-directing agents (SDAs), phase transfer catalysts (PTCs), electrolyte salts for supercapacitor batteries, pharmaceutical and agrochemical intermediates, and other specialty chemicals (PASC).

In India, the firm is the only commercial maker of SDAs for zeolites. As of March 31, 2021, they manufactured over 154 products.

It operates two production plants in Gujarat, one in Ankleshwar and the other in Dahej.

The company serves customers across various industries, including the automotive, petroleum, pharmaceutical, agrochemicals, paints and coatings, dyes and pigments, personal care, and flavour and fragrances industries. It exports products to over 25 countries, including the USA, China, Germany, Japan, South Africa, and the UK.

The company’s customers include Merck, Bayer AG, Asian Paints, Ipox Chemicals KFT, Laurus Labs, Tosoh Asia Pte Ltd, SRF, Navin Fluorine Internationa, Oriental Aromatics, Atul, Otsuka Chemical, Meghmani Organics, Divi's Laboratories, Hawks Chemical Company, Firmenich Aromatics, Jiangsu Guotai Super Power New Materials, and Jade Chem Co.

Promoters & Management

The company is promoted by Chintan Shah, Ajay Patel, and Shekhar Somani.

Ajaykumar Mansukhlal Patel and Shekhar Rasiklal Somani are the whole time directors on the Board. Manher Chimanlal Desai, Subhash Ambubhai Patel, and Avani Rajesh Umatt are the independent directors.

Chintan Nitinkumar Shah is the managing director on the Board and has over 24 years of experience. Mahesh Tanna is the chief financial officer of the company.

Financials

During fiscal FY19-FY21, Tatva Chintan recorded growth in revenue at a CAGR of 20.7 percent and profit at a CAGR of 59.5 percent. EBITDA grew at a CAGR of 44.52 percent during the period.

Competitive Strengths

Leading manufacturer of structure-directing agents and phase transfer catalysts, with consistent quality

Global presence with a wide customer base across various industries having high entry barriers

Diversified specialised product portfolio requiring strong technical know-how

Modern manufacturing facilities with a focus on ‘green’ chemistry processes

Strong R&D capabilities

Experienced Promoters with a strong management team

Robust Financial Performance

First Published:Jul 16, 2021 10:07 AM IST