Patel Chem Specialities Limited, a well-established manufacturer of pharmaceutical excipients, is set to launch its Initial Public Offering (IPO) on July 25, 2025. The company, with decades of experience, produces essential raw materials for drug formulation such as Sodium CMC, Sodium Starch Glycolate (SSG), Croscarmellose Sodium (CCS), Calcium CMC, Magnesium Stearate, and Pregelatinised Starch. Additionally, it manufactures the API intermediate Sodium Monochloroacetate, making it a significant player in the pharmaceutical supply chain.

This IPO is a Book Built Issue totaling ₹ 58.8 Crores, consisting entirely of a fresh issue of 70 lakh equity shares. The shares will be listed on the BSE SME platform, with the tentative listing date set for August 1, 2025.

IPO Details at a Glance

• IPO Opening Date: July 25, 2025

• IPO Closing Date: July 29, 2025

• Issue Size: ₹ 58.8 Crores

• Price Band: ₹ 82 to ₹ 84 per share

• Lot Size: 1,600 shares

• Minimum Investment: ₹ 2,68,800 (2 lots)

• Market Capitalisation (Post-issue at ₹84): ₹ 208.90 Crores

• Registrar: MUFG Intime India Pvt Ltd

• Lead Managers: CUMULATIVE CAPITAL and UNISTONE CAPITAL

• Market Maker: Globalworth Securities Ltd

The company has allocated 19,87,200 shares to Anchor Investors, raising ₹ 16.69 Crores at ₹ 84 per share.

GMP and Listing Expectations

The Grey Market Premium (GMP) of Patel Chem Specialities IPO stands at ₹ 11, implying an expected listing price of ₹ 95, a 13.09% premium over the upper band price. However, investors must note that the GMP is unofficial, unregulated, and driven by market sentiment rather than fundamentals. It serves only educational purposes and is not a guarantee of listing performance.

Financial Performance

Over the past three financial years, Patel Chem Specialities has demonstrated strong financial growth:

• Revenue from Operations:

  • FY25: ₹ 10,555.18 Lakh

  • FY24: ₹ 8,271.61 Lakh

  • FY23: ₹ 6,974.75 Lakh

• EBITDA:

  • FY25: ₹ 1,573.02 Lakh

  • FY24: ₹ 1,202.18 Lakh

  • FY23: ₹ 582.64 Lakh

• Profit After Tax (PAT):

  • FY25: ₹ 1,056.52 Lakh

  • FY24: ₹ 765.62 Lakh

  • FY23: ₹ 288.61 Lakh

This steady year-on-year growth highlights the company’s expanding scale and efficient operations.

Valuation Metrics and Financial Ratios

• Pre-issue EPS (FY24): ₹ 6.1

• Post-issue EPS (FY24): ₹ 4.25

• Pre-issue P/E Ratio: 13.77x

• Post-issue P/E Ratio: 19.77x

• Industry P/E Ratio: 18x

• Return on Capital Employed (ROCE): 36.26%

• Return on Equity (ROE): 29.85%

• Return on Net Worth (RoNW): 24.32%

These figures suggest that while the IPO is fully priced, it is not overvalued given the industry comparison. The strong returns on capital and equity indicate efficient use of funds and profitability.

IPO Objective and Use of Funds

Patel Chem Specialities plans to utilise the net proceeds for:

1. Capital expenditure of ₹ 4,314.78 Lakh for establishing a new plant at Indrad, Mahesana. This plant will be used for manufacturing:

   • Croscarmellose Sodium (CCS)

   • Sodium Starch Glycolate (SSG) from Corn and Potato Starch base

   • Calcium CMC

2. General Corporate Purposes

The proposed plant expansion is aimed at capacity building and product diversification, positioning the company for future scalability.

Promoters and Management Team

The leadership team is comprised of highly experienced promoters:

• Bhupesh Patel (Managing Director):
  Over 30 years of industry experience. He played a vital role in plant establishment, product development, and marketing strategy.

• Anshu Patel (Whole-Time Director):
  A qualified professional in Homoeopathic Medicine and Surgery with 10 years of experience. She oversees strategic planning and day-to-day operations.

Their complementary skills and experience have been crucial in shaping the company’s robust performance and reliable growth.

Subscription & Allotment Process

• Anchor Investor Shares Allotted: 19,87,200

• Anchor Raised Amount: ₹ 16.69 Crores

• Allotment Date: July 30, 2025

• Listing Date: August 1, 2025

To check IPO allotment status:

1. Visit the registrar website

2. Select Patel Chem Specialities IPO

3. Enter PAN/Application Number/DP Client ID

4. View allotment status

Should You Apply? Expert Recommendation

Considering the following factors:

• Steady revenue growth

• Strong profitability ratios

• High return metrics (ROCE & ROE)

• Reasonable valuation against industry P/E

• Healthy demand from Anchor Investors

• GMP indicating possible listing gains

The IPO appears to offer short-term listing gain potential. Therefore, Risk-tolerant investors looking for IPO listing gains may consider subscribing to Patel Chem Specialities IPO. However, long-term investors should evaluate post-listing performance and future quarterly results before making extended commitments.

Disclaimer: This content is for educational and informational purposes only and does not constitute financial advice or an investment recommendation. All investors should seek professional advice before investing. Market investments carry risks, and past performance is not indicative of future results.

The Upcoming IPOs in this week and coming weeks are Takyon Networks, Mehul Colours, Aditya Infotech, Sri Lotus Developers & Realty, Lakshmi India Finance, Jyoti Global Plast, B.D. Industries (Pune), Kaytex Fabrics, Umiya Mobile, Shree Refrigerations, Sellowrap Industries, Repono, Shanti Gold International, Patel Chem Specialities, NSDL.

The Current active IPO are Brigade Hotel Ventures, Indiqube Spaces, GNG Electronics, TSC India, Monarch Surveyors & Engineering Consultants.

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