Shiv Texchem is a prominent player in the importation and distribution of hydrocarbon-based chemicals, specializing in a diverse range of products, including Acetyls, Alcohol, Aromatics, Nitriles, Monomers, Glycols, Phenolics, Ketones, and Isocyanates. These chemicals serve as critical raw materials with applications across various industries, such as paints and coatings, printing inks, agro-chemical products, specialty polymers, pharmaceuticals, and specialty industrial chemicals.

The IPO for Shiv Texchem is a Book Built Issue totaling ₹101.35 crores, consisting entirely of a fresh issue of 61.05 lakh shares. The subscription period opened on October 08, 2024, and will close on October 10, 2024. Allotment is anticipated to be finalized on or around October 11, 2024, with shares listed on the BSE SME with a tentative listing date of October 15, 2024.

The share price band for the IPO is set between ₹158 and ₹166 per equity share, requiring a minimum investment of ₹1,32,800 for retail investors purchasing 800 shares. For High-Net-Worth Individuals (HNIs), the minimum investment is ₹2,65,600 for 2 lots (1,600 shares).

Vivro Financial Services Private Limited is the book-running lead manager, while Link Intime Private Limited serves as the registrar for the issue. Rikhav Securities Limited will act as the market maker for Shiv Texchem.

Grey Market Premium and Subscription Status

Currently, the Grey Market Premium (GMP) for Shiv Texchem shares is estimated to be between ₹20 and ₹25, reflecting potential investor interest. However, it’s important to note that no real trading occurs based on GMP, and its value fluctuates based on supply and demand in an unregulated market.

As of 02:00 PM on October 09, 2024, the IPO's live subscription status shows that it has been subscribed 7.37 times on its second day, indicating strong demand from investors.

Anchor Investor Participation

Shiv Texchem has successfully raised ₹28.87 crores from anchor investors, allocating 17,39,200 equity shares at a price of ₹166 per share. This substantial institutional backing showcases confidence in the company's future prospects.

Allotment Process

The allotment date for the Shiv Texchem IPO is scheduled for October 11, 2024. Investors can check their allotment status by visiting the registrar’s website and entering their application number, PAN, or DP Client ID.

Objectives of the IPO

Proceeds from the fresh issue will be utilized for:

₹7,500.00 Lakhs for long-term working capital requirements.

General corporate purposes.

Financial Performance Overview

Shiv Texchem has demonstrated solid financial growth, with restated total income for the quarter ended June 30, 2024, amounting to ₹56,604.99 lakhs. For Fiscal Years 2024, 2023, and 2022, total incomes were ₹1,53,668.79 lakhs, ₹1,11,866.98 lakhs, and ₹86,547.46 lakhs, respectively. The restated EBITDA figures also reflect positive trends, with ₹1,886.24 lakhs for the quarter ended June 30, 2024. The profit after tax for the same quarter was ₹1,005.89 lakhs, indicating steady growth.

For the IPO, Shiv Texchem is offering shares with a pre-issue EPS of ₹17.64 and a post-issue EPS of ₹12.99. The pre-issue P/E ratio is 9.41x, while the post-issue P/E ratio stands at 12.77x. The company's ROCE for FY24 is 26.99%, and RoE is 19.08%, suggesting that the IPO is fairly priced.

Conclusion

Given the company’s financial metrics and market conditions, the GMP indicates potential listing gains of 15%. However, considering the overall market dynamics, investors should assess their risk tolerance before proceeding with the Shiv Texchem Limited IPO for listing gains or long-term investment strategies.

The current active IPO is  Shiv Texchem Limited IPO, Garuda Construction and Engineering Limited IPO.

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