Citichem India Limited is a trading company engaged in the procurement and supply of organic and inorganic chemicals, bulk drugs, and food chemicals primarily catering to the pharmaceutical industry. The company also provides food preventives and chemicals under its own brand name, which are distributed to various industries such as aluminium, steel, textiles, paper, dairy, paints, dyes, pharma, food, and adhesives. Citichem India ensures the safe and efficient delivery of bulk supplies through its dedicated distribution team.

The company is launching an IPO of ₹12.60 Crores, consisting entirely of a fresh issue of 18 lakh shares. The fixed price of the shares is set at ₹70 per equity share, and at this price, the market capitalization of Citichem India will be ₹47.60 Crores. The lot size for the IPO is 2,000 shares, with a minimum investment of ₹1,40,000 for retail investors. High-Net-Worth Individuals (HNIs) must invest in a minimum of 2 lots (4,000 shares), totaling ₹2,80,000.

The subscription period for the Citichem India IPO is from December 27 to December 31, 2024, with an expected allotment date of January 1, 2025. The shares will be listed on the BSE SME segment on or about January 3, 2025.

The book-running lead manager for this IPO is Horizon Management Private Limited, and the registrar for the issue is Kfin Technologies Limited. Aftertrade Broking Pvt Ltd. is the market maker for the IPO.

As of December 24, 2024, the Grey Market Premium (GMP) for the IPO is ₹8, indicating a potential listing gain of 11.43% based on current market conditions and the company’s financial performance. However, it is important to note that GMP is based on unregulated trading and can fluctuate widely, and real price discovery will only occur once the shares are listed.

The financial performance of Citichem India shows steady growth, with revenues for the period ending June 30, 2024, at ₹149.07 Lakhs. The EBITDA for the same period stood at ₹28.39 Lakhs, and the profit after tax (PAT) for the period was ₹19.95 Lakhs. The company’s EPS for FY24 is ₹2.24 pre-issue and ₹1.64 post-issue, with a pre-issue P/E ratio of 31.25x and a post-issue P/E ratio of 42.56x. These figures suggest that the IPO is fully priced when compared to the industry P/E ratio of 60x.

The objectives of the IPO include funding capital expenditure for property acquisition, purchasing transportation vehicles, and covering general corporate purposes as well as issue expenses.

Considering the financial performance, Grey Market Premium, and valuation, we recommend that investors avoid the Citichem India IPO if they are seeking listing gains, as the IPO appears to be fully priced. However, those with a long-term investment horizon may consider monitoring the company’s post-listing performance.

The Upcoming IPOs in this week and coming weeks are Citichem India, Indo Farm, Technichem Organics, Leo Dry Fruits, Solar91 Cleantech, Rosmerta Digital and Avanse Financial.

The Current active IPO is Anya Polytech and Unimech Aerospace.

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