Patel Chem Specialities Limited, a leading manufacturer of pharmaceutical excipients, has launched its ₹58.8 crore Book Built SME IPO, opening for subscription from July 25 to July 29, 2025. The IPO consists entirely of a fresh issue of 70 lakh equity shares, with no offer for sale (OFS). The price band is set at ₹82 to ₹84 per share, with a market capitalisation of ₹208.90 crore at the upper end.

The IPO has seen substantial investor interest, with the issue subscribed 9.67 times by 12:30 PM on July 28, its second day of subscription.

Company Overview and Product Profile

Founded by Bhupesh Patel and Anshu Patel, Patel Chem Specialities is known for producing high-quality excipients, which are essential ingredients used in pharmaceutical drug formulation. Their product line includes:

• Sodium Carboxy Methyl Cellulose (CMC)

• Sodium Starch Glycolate (SSG)

• Croscarmellose Sodium (CCS)

• Calcium CMC

• Magnesium Stearate

• Pregelatinised Starch

• Sodium Monochloroacetate (API Intermediate)

These ingredients are critical for ensuring drug stability, bioavailability, and patient compliance. The company has a strong presence in both domestic and international markets.

IPO Objectives and Capital Allocation

According to the Red Herring Prospectus, the company intends to utilise the net proceeds as follows:

1. ₹4,314.78 lakh to set up a new manufacturing plant in Indrad, Mahesana, for products like CCS, SSG (corn and potato base), and Calcium CMC.

2. The remaining proceeds will be allocated for general corporate purposes, aimed at enhancing the company’s working capital and operational scale.

Anchor Investors and Subscription Details

Ahead of the public issue, Patel Chem Specialities raised ₹16.69 crore from anchor investors by allocating 19,87,200 equity shares at ₹84 apiece. The Qualified Institutional Buyers (QIBs) category was used for this allocation.

As of July 28, 2025, 12:30 PM, the IPO saw healthy participation across all investor categories, indicating robust interest in the SME segment.

IPO GMP and Listing Expectations

The Grey Market Premium (GMP) for the Patel Chem IPO stood at ₹11 as of July 23, implying an expected listing price of ₹95, a 13.09% gain over the issue price. However, investors are advised not to rely solely on grey market trends, as they are unofficial and operate in an unregulated market.

Issue Details at a Glance

Management and Promoters

The company's leadership is spearheaded by Bhupesh Patel, Managing Director, with over 30 years of experience in pharmaceuticals and nutraceuticals. He has been pivotal in establishing the firm’s production units and shaping product innovation and marketing strategy.

Anshu Patel, the Whole-Time Director, brings a decade of experience and oversees operations and strategic planning. Together, the leadership duo has contributed to the company's consistent financial growth and market reputation.

Financial Performance

Patel Chem Specialities has delivered a solid financial track record over the past three fiscal years:

The steady CAGR in revenue and profit demonstrates growing demand for their specialised pharmaceutical inputs.

Valuation Metrics and Ratios

The IPO is being offered at a pre-issue P/E of 13.77x and a post-issue P/E of 19.77x, compared to the industry average of 18x. Other key metrics include:

• Pre-issue EPS (FY24): ₹6.1

• Post-issue EPS (FY24): ₹4.25

• ROCE (FY24): 36.26%

• ROE (FY24): 29.85%

• RoNW (FY24): 24.32%

These figures suggest that the IPO is fairly to fully priced, with strong return ratios adding to investor confidence.

Patel Chem Specialities IPO GMP Trend

While the GMP trend is favourable, investors should exercise caution as GMP is unofficial and speculative.

IPO Allotment and Listing Timeline

The IPO allotment date is July 30, 2025, with allotment details available on the Registrar's website on the same day. Here's how investors can check their allotment:

1. Visit the official IPO allotment portal of MUFG Intime India.

2. Select "Patel Chem Specialities Limited IPO" from the dropdown.

3. Enter either PAN, DP Client ID, or Application Number.

4. Click "Submit" to view the allotment status.

The equity shares are scheduled to be listed on the BSE SME platform on August 1, 2025.

Risk Factors and Investment Outlook

• This is an SME IPO, which inherently carries higher volatility and lower liquidity than mainboard IPOs.

• The company operates in a competitive excipient and API intermediate market, which is prone to regulatory changes.

• Large-ticket retail investment (₹2.68 lakh minimum) could limit accessibility for small retail investors.

Despite these risks, the strong financials, experienced management, and healthy GMP suggest potential for short-term listing gain

Disclaimer: This review is for informational purposes only. It should not be construed as investment advice. Investors must consult their financial advisors before investing. Past performance is not indicative of future results. Investment in securities is subject to market risks.

The Upcoming IPOs in this week and coming weeks are M&B Engineering, Cash Ur Drive Marketing, Renol Polychem, Jyoti Global Plast, Takyon Networks, Mehul Colours, Aditya Infotech, Sri Lotus Developers & Realty, Lakshmi India Finance, Jyoti Global Plast, B.D. Industries (Pune), Kaytex Fabrics, Umiya Mobile, Repono, NSDL.

The Current active IPO are Shree Refrigerations, Sellowrap Industries, Shanti Gold International, Patel Chem Specialities, Brigade Hotel Ventures, Indiqube Spaces, GNG Electronics, TSC India.

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