Neptune Petrochemicals Limited has launched its Initial Public Offering (IPO), inviting investors to participate in a fresh issue aggregating ₹73.2 Crores. This Book Built Issue comprises entirely of fresh equity shares, totaling 60 lakh shares. The IPO opens for subscription on May 28, 2025, and closes on May 30, 2025. The company is set to get listed on the BSE SME platform, with allotment expected on or about June 2, 2025, and the tentative listing date on or about June 4, 2025.

Business Overview

Neptune Petrochemicals operates in the manufacturing and trading of a diverse range of bitumen products, including bitumen emulsions and allied products. Their portfolio includes multiple grades of bitumen such as Polymer Modified Bitumen (PMB) and Crumb Rubber Modified Bitumen (CRMB), serving a wide range of industries with a focus on construction and industrial applications. This specialization positions the company well within its sector, benefiting from infrastructure growth and industrial demand.

IPO Price Band and Subscription Details

The IPO price band is set between ₹115 and ₹122 per equity share. The company’s market capitalization at the upper price band of ₹122 per share will be approximately ₹276.37 Crores. The minimum lot size is 1,000 shares, requiring retail investors to invest a minimum of ₹1,22,000, whereas High-Net-Worth Individuals (HNIs) must apply for a minimum of two lots (2,000 shares), amounting to ₹2,44,000.

The Book Running Lead Manager of the IPO is Beeline Capital Advisors Private Limited. The registrar for the issue is MUFG Intime India Private Limited, and Spread X Securities Private Limited is the designated Market Maker for this IPO.

Anchor Investor Subscription

The company successfully raised ₹20.84 Crores from anchor investors, who subscribed at the upper price band of ₹122 per share. A total of 17,09,000 equity shares were allotted to these qualified institutional buyers (QIBs), providing a strong foundation for the IPO subscription.

Grey Market Premium (GMP) Update

Currently, the Grey Market Premium (GMP) for Neptune Petrochemicals IPO is reported at ₹0, indicating no expected listing gains. The GMP reflects unregulated demand-supply dynamics and is primarily informative. Given the company’s financials and IPO pricing, no significant premium is anticipated in the grey market before listing.

Live IPO Subscription Status

As of 10:30 AM on the IPO’s opening day, May 28, 2025, the subscription stands at a modest 0.03 times. Investors can track the real-time subscription status via NSE and other stock market portals to monitor demand during the subscription period.

Financial Performance Highlights

The company has demonstrated steady growth in its financial performance over recent years:

• Revenue from operations: ₹620.16 Crores (9 months ended Dec 31, 2024), ₹675.96 Crores (FY 2024), ₹709.30 Crores (FY 2023), and ₹82.16 Crores (FY 2022).

• EBITDA: ₹26.65 Crores (9 months ended Dec 31, 2024), ₹28.68 Crores (FY 2024), ₹14.53 Crores (FY 2023), ₹0.96 Crores (FY 2022).

• Profit After Tax: ₹19.46 Crores (9 months ended Dec 31, 2024), ₹20.81 Crores (FY 2024), ₹10.39 Crores (FY 2023), ₹0.68 Crores (FY 2022).

Key Financial Ratios

• Pre-issue EPS for FY24 stands at ₹13.87, with post-issue EPS at ₹9.19.

• Pre-issue Price-to-Earnings (P/E) ratio is 8.80x, post-issue P/E is 13.28x, compared to industry P/E of around 18x, indicating reasonable valuation.

• Return on Capital Employed (ROCE) for FY24 is notably high at 117.86%.

• Return on Equity (ROE) is 96.85%, and Return on Net Worth (RoNW) is 65.25%.

• Annualized EPS is ₹16.34, with a trailing P/E ratio of 7.46x.

These metrics demonstrate the company’s strong profitability and efficient use of capital, suggesting the IPO is priced fairly in line with industry standards.

Objectives of the IPO Proceeds

Neptune Petrochemicals plans to deploy the net proceeds from the IPO towards:

1. ₹5.15 Crores for installation of additional plant and machinery and infrastructure.

2. ₹14.75 Crores for the purchase of office space.

3. ₹42.00 Crores to fund working capital requirements.

4. Remaining funds for general corporate purposes.

This capital infusion aims to support expansion and operational growth.

Management and Promoters

The company is led by an experienced management team, including Managing Director Mr. Pareshkumar Subodhchandra Shah with 20 years of industry experience, and Whole-Time Director Mr. Sanjaykumar Subodhchandra Shah with 15 years of experience. Their continued leadership is a positive factor for future business prospects.

Expert Review and Recommendation

Given the IPO’s pricing, financial health, and current GMP of zero, investors are advised to approach Neptune Petrochemicals IPO with caution if seeking listing gains. The IPO appears fairly valued without significant upside in the grey market. Long-term investors focused on the bitumen and allied product industry’s growth may find it suitable, but short-term listing gains are unlikely.

The Upcoming IPOs in this week and coming weeks are 3B Films, Victory Electric Vehicles International, Wagons Learning.

The Current active IPO are N R Vandana Tex Industries, Scoda Tubes, Neptune Petrochemicals, Blue Water Logistics, Astonea Labs, Nikita Papers, Prostarm Info Systems, Aegis Vopak Terminals, Schloss Bangalore.

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