Technichem Organics Ltd. IPO provides an investment opportunity in a well-established chemical manufacturer, involved in the production of a range of Pyrazoles, Pyrazolones, Speciality Chemicals, Pigment & Dye Intermediates, and Air Oxidation Chemistry. These chemicals serve industries like pharmaceuticals, agriculture, coatings, pigments, and dyes. The Technichem Organics IPO is a Book Built Issue amounting to ₹25.25 Crores, consisting of 45.90 Lakh shares with a price range of ₹52 to ₹55 per share.

The subscription period for this IPO began on December 31, 2024, and closed on January 2, 2025. The allotment date is scheduled for January 3, 2025, with shares expected to list on the BSE SME on January 7, 2025. The market capitalization at the upper price band of ₹55 per share is ₹95.26 Crores, positioning it as a moderate-sized IPO within the chemical manufacturing sector.

IPO Subscription and Allotment Information:

• The lot size for retail investors is set at 2,000 shares, requiring an investment of ₹1,10,000, while HNIs must invest ₹2,20,000 for two lots (4,000 shares).
• The GMP (Grey Market Premium) as of December 30, 2024, is ₹14, indicating a 25.45% premium. This suggests significant listing gains based on current market sentiment.

Subscription Status:

• As of January 2, 2025, the IPO has been subscribed 392.62 times, signaling exceptional investor demand. Check the live subscription status on the BSE website for the most up-to-date information.

Anchor Investors:

• Technichem Organics raised ₹7.13 Crores from Anchor Investors, with 12.98 Lakh equity shares allocated at ₹55 per share. This allocation points to strong institutional backing, likely reflecting confidence in the company's growth prospects.

Financial Performance Overview:

• Revenues for FY 2024 were ₹4,696.84 Lakh, with EBITDA at ₹1,010.61 Lakh, showing healthy profitability. Profit After Tax (PAT) for FY 2024 stood at ₹472.68 Lakh.
• The pre-issue EPS is ₹3.71, with a P/E ratio of 14.82x, while the post-issue EPS is ₹2.73, with a P/E ratio of 20.15x. Compared to the industry P/E ratio of 93.50x, this indicates the IPO is reasonably priced.
• The ROCE (Return on Capital Employed) is 22.57%, and the ROE (Return on Equity) is 27.39%, both suggesting strong returns on investments. Additionally, the RoNW (Return on Net Worth) is 24.09%, reflecting good profitability and operational efficiency.

Objectives of the IPO: The funds raised from the IPO will be used for:

1. Setting up a new plant ("Plant-4"): ₹703.82 Lakh for capital expenditure.
2. Repayment of borrowings: ₹1,023.51 Lakh for repayment or prepayment of loans.
3. General corporate purposes.

Investment Considerations: Given the strong subscription and healthy financial metrics, Technichem Organics presents a solid investment opportunity for risk-tolerant investors. The Grey Market Premium (GMP) of ₹14 suggests potential listing gains, but it also comes with market risks, especially as the IPO’s P/E ratio of 20.15x is above the pre-issue level of 14.82x.

Technichem Organics IPO Review: Technichem Organics Ltd. stands out with its strong technical foundation, led by technocrats with over 25 years of experience in the industry. The company's robust financial performance, combined with high investor interest reflected in the GMP, makes the IPO attractive for riskier investors seeking listing gains. However, potential investors should consider the company's ongoing investment in new plants and debt repayment, which might influence short-term profits.

Given the high subscription and favorable GMP trends, we recommend applying to the Technichem Organics IPO if you are looking for a listing gain, though long-term investors may also find it appealing due to the company's growth prospects in the chemical manufacturing sector.

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The Current active IPO are   Fabtech Technologies, Davin Sons and Parmeshwar Metal.

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