Patel Chem Specialities Limited, a leading manufacturer of high-quality pharmaceutical excipients and a key player in the active pharmaceutical ingredient (API) intermediates segment, launched its IPO on July 25, 2025, with the subscription period closing on July 29, 2025. The IPO, amounting to ₹58.8 Crores, is entirely a Fresh Issue of 70 lakh equity shares, and the price band has been fixed between ₹82 to ₹84 per equity share.

This IPO garnered exceptional investor interest and was subscribed 155.63 times on the final day of bidding, reflecting robust market sentiment and confidence in the company’s future.

Company Overview

Patel Chem Specialities Limited is involved in the manufacturing of pharmaceutical excipients, such as Sodium Carboxy Methyl Cellulose (Sodium CMC), Sodium Starch Glycolate (SSG), Croscarmellose Sodium (CCS), Calcium CMC, Magnesium Stearate, and pregelatinised starch. It also manufactures the API intermediate Sodium Monochloroacetate, a crucial raw material for drug synthesis. With decades of industry experience, Patel Chem has established itself as a reliable partner in the pharmaceutical supply chain.

IPO Details

• Issue Size: ₹58.8 Crores

• Type of Issue: Book Built Issue (100% Fresh Issue)

• Shares Offered: 70,00,000 equity shares

• Price Band: ₹82 - ₹84

• Lot Size: 1,600 shares

• Minimum Investment (Retail): 3,200 shares (2 lots) = ₹2,68,800

• Listing on: BSE SME

• Tentative Listing Date: August 1, 2025

• Registrar: MUFG Intime India Private Limited

• BRLMs: Cumulative Capital Pvt Ltd, Unistone Capital Pvt Ltd

• Market Maker: Globalworth Securities Limited

IPO Subscription Status (Final Day - July 29, 2025)

The IPO received a staggering response across investor categories:

• QIB: Subscribed multiple times

• NII: Extremely oversubscribed

• Retail: Significantly oversubscribed
  Overall, the IPO saw a subscription of 155.63 times on the final day, showcasing overwhelming investor enthusiasm.

Anchor Investor Allotment

Prior to the main bidding, Anchor Investors subscribed to ₹16.69 Crores worth of shares at ₹84 per share. A total of 19,87,200 equity shares were allocated to anchor investors. This pre-IPO investment reflects a strong endorsement from institutional investors.

Grey Market Premium (GMP) Analysis

As per grey market data on July 23, 2025, the GMP was ₹11, implying a 13.09% premium over the upper end of the issue price (₹84). The expected listing price is around ₹95. However, it is important to note that GMP is an informal metric and not a reliable indicator of actual listing performance.

Financial Performance

Patel Chem has delivered steady revenue and profit growth over the past three financial years:

• Revenue:

  • FY23: ₹6,974.75 Lakh

  • FY24: ₹8,271.61 Lakh

  • FY25: ₹10,555.18 Lakh

• EBITDA:

  • FY23: ₹582.64 Lakh

  • FY24: ₹1,202.18 Lakh

  • FY25: ₹1,573.02 Lakh

• Profit After Tax (PAT):

  • FY23: ₹288.61 Lakh

  • FY24: ₹765.62 Lakh

  • FY25: ₹1,056.52 Lakh

Key Ratios and Valuation

• Pre-Issue EPS (FY24): ₹6.1

• Post-Issue EPS: ₹4.25

• Pre-Issue P/E: 13.77x

• Post-Issue P/E: 19.77x

• Industry P/E: Approx. 18x

• ROCE (FY24): 36.26%

• ROE (FY24): 29.85%

• RoNW: 24.32%

The valuation indicates that the IPO is fully priced and aligned with the industry average, suggesting a fair entry point for potential investors.

Management Team

• Bhupesh Patel – Managing Director
  With over 30 years of experience in the pharmaceutical and nutraceutical sectors, he has been a key driving force behind the company’s growth and operational strategy.

• Anshu Patel – Whole-Time Director
  A qualified Homoeopathic medical practitioner with a decade of business experience, she leads strategic planning and operational execution.

IPO Objectives

The net proceeds from the IPO will be primarily used for:

1. Capital Expenditure
   ₹4,314.78 Lakhs will be used to set up a new manufacturing plant at Indrad, Mahesana. The plant will focus on manufacturing CCS, SSG (Corn & Potato Starch base), and Calcium CMC.

2. General Corporate Purposes
   Funds will also be allocated for meeting general operational and strategic needs.

Allotment and Listing Timeline

• IPO Closing Date: July 29, 2025

• Allotment Finalisation: July 30, 2025 (Wednesday)

• Credit of Shares to Demat: July 31, 2025

• Listing Date: August 1, 2025 (Friday)

How to Check IPO Allotment

To check your allotment status online:

1. Visit the official registrar's website

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

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

4. Submit to view allotment details

Patel Chem Specialities IPO Review – Should You Apply?

Given the company's consistent financial performance, strong return ratios, and expansion plans, Patel Chem presents a moderate-risk investment opportunity. With a 13.09% GMP indicating listing gains and well-established promoter credentials, it may attract listing gain-focused investors.

However, the valuation is on the higher end, and the SME segment carries inherent volatility, making it suitable only for investors with high-risk tolerance.

Disclaimer:

The information provided in this article is for educational and informational purposes only. It should not be construed as investment advice. Investors are advised to consult with certified financial advisors before making any investment decisions. IPOs are subject to market risk. Read all documents carefully before investing.

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The Current active IPO are B.D. Industries (Pune), NSDL, Takyon Networks, Mehul Colours, M&B Engineering, Sri Lotus Developers & Realty, Aditya Infotech, Lakshmi India Finance, Kaytex Fabrics, Umiya Mobile, Repono.

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