Neptune Petrochemicals Limited is a well-established company engaged in manufacturing and trading a comprehensive range of bitumen products, bitumen emulsions, and allied products. The company’s portfolio spans various grades of bitumen, including modified bitumen variants like Polymer Modified Bitumen and Crumb Rubber based modified bitumen, catering primarily to the construction and industrial sectors. This diverse product offering positions Neptune Petrochemicals as a significant player in its niche market.

IPO Details and Subscription Timeline

The company has launched a Book Built Issue fresh IPO amounting to ₹ 73.2 Crores, comprising entirely a fresh issue of 60.00 lakh equity shares. The subscription period for the IPO is scheduled from May 28, 2025, to May 30, 2025. Post subscription, the allotment of shares is expected to be finalized on or about Monday, June 2, 2025, with the tentative listing date on the BSE SME set around Wednesday, June 4, 2025.

The IPO’s price band is fixed between ₹115 and ₹122 per equity share. At the upper end of the price band, the market capitalization of Neptune Petrochemicals Limited will be approximately ₹276.37 Crores. The minimum lot size for subscription is 1,000 shares, translating to a minimum retail investor commitment of ₹1,22,000. High Net Worth Individuals (HNIs) must apply for a minimum of 2 lots (2,000 shares), equating to a minimum investment of ₹2,44,000.

Underwriters and Market Maker

Beeline Capital Advisors Private Limited acts as the Book Running Lead Manager for the IPO. The registrar for the issue is MUFG Intime India Private Limited, and Spread X Securities Private Limited has been appointed as the market maker for the IPO, ensuring liquidity in the post-listing phase.

Grey Market Premium (GMP) and Listing Outlook

The Grey Market Premium for Neptune Petrochemicals IPO is currently ₹0, indicating no premium over the IPO price in the unofficial market. This is attributed to the company's financial performance and market sentiments. It is important to note that GMP figures do not always reflect actual listing gains or losses, as they depend on unregulated demand and supply. Therefore, investors are advised to consider GMP only for educational purposes.

Anchor Investor Allocation

Neptune Petrochemicals has successfully raised approximately ₹20.84 Crores from Anchor Investors at the upper price band of ₹122 per share. A total of 17,09,000 equity shares were allocated to anchor investors from the Qualified Institutional Buyers (QIB) portion. Anchor investor participation generally reflects strong institutional confidence in the company.

How to Check IPO Allotment Status

Investors can check their allotment status on or after June 2, 2025, by:

• Visiting the registrar’s IPO allotment status page.

• Selecting Neptune Petrochemicals Limited IPO from the dropdown.

• Entering their application number, PAN, or DP Client ID.

• Submitting the information to view allotment status.

Objectives of the IPO Proceeds

Neptune Petrochemicals plans to deploy the IPO funds towards:

1. Capital expenditure for installing additional plant and machinery and related infrastructure (~₹5.15 Crores).

2. Purchase of office space (~₹14.75 Crores).

3. Working capital requirements (~₹42 Crores).

4. General corporate purposes.

Financial Performance Overview

The company has demonstrated steady financial growth over recent years:

• Revenue from operations increased from ₹8,216.32 Lakh in FY22 to ₹67,596.79 Lakh in FY24 (FY period ended Dec 31, 2024).

• EBITDA rose from ₹96.01 Lakh in FY22 to ₹2,867.83 Lakh in FY24.

• Profit After Tax (PAT) grew from ₹68.29 Lakh in FY22 to ₹2,081.56 Lakh in FY24.

This growth trajectory underlines Neptune Petrochemicals’ operational strength and market presence.

Key Valuation Metrics

For FY24, the company reported a pre-issue EPS of ₹13.87 and a post-issue EPS of ₹9.19. The pre-issue P/E ratio stands at 8.80x, while the post-issue P/E is estimated at 13.28x, which is favorable compared to the industry average P/E of 18x. Return ratios are impressive, with ROCE at 117.86%, ROE at 96.85%, and RoNW at 65.25%. The annualized EPS is ₹16.34 with a P/E of 7.46x, indicating the IPO is fairly valued.

Management Experience

The company’s growth owes significantly to its management team, especially the promoters and directors. The Managing Director, Mr. Pareshkumar Subodhchandra Shah, brings 20 years of industry experience, while the Whole Time Director, Mr. Sanjaykumar Subodhchandra Shah, has 15 years of relevant expertise.

Investment Recommendation

Given the IPO valuation, financial strength, and zero Grey Market Premium, the listing gains potential appears limited. Hence, investors should approach the Neptune Petrochemicals IPO cautiously, and avoid it solely for listing gains. However, those looking for exposure to bitumen and allied product industries with decent financial metrics might consider it as a long-term investment.

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The Current active IPO are Aegis Vopak Terminals, Schloss Bangalore, Unified Data - Tech Solutions.

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