Shiv Texchem IPO to Launch: Know the IPO Price Band

Established in 2005, Shiv Texchem Limited imports and distributes hydrocarbon-based secondary and tertiary chemicals, which are important raw materials for numerous industries. The company procures these chemicals from international manufacturers and suppliers and distributes them to the domestic industry. Over the last three financial years, the company has expanded its product portfolio from 21 products in FY 2022 to 39 products in FY 2024, and its customer base has grown from over 400 to over 650 customers. As of 31st March 2024, Shiv Texchem had 50 permanent employees.

The Objectives of the Issue

Shiv Texchem Limited intends to utilise the Net Proceeds from the Issue towards the following objectives:

1. To meet long-term working capital requirements
2. General Corporate Purposes

Highlights of Shiv Texchem IPO

Shiv Texchem IPO is set to launch with a book-built issue of ₹101.35 crores. The issue is entirely fresh. Here are the key details of the IPO:

• The IPO opens for subscription on 8th October 2024 and closes on 10th October 2024.
• The allotment is expected to be finalised on 11th October 2024.
• Refunds will be initiated on 14th October 2024.
• Credit of shares to Demat accounts is also expected on 14th October 2024.
• The company will tentatively list on BSE SME on 15th October 2024.
• The price band is set at ₹158 to ₹166 per share.
• The fresh issue comprises 61.06 lakh shares, aggregating to ₹101.35 crores.
• The minimum lot size for the application is 800 shares.
• Retail investors need to invest a minimum of ₹132,800.
• The minimum investment for HNI is 2 lots (1,600 shares), amounting to ₹265,600.
• Vivro Financial Services Private Limited is the book running lead manager for the IPO.
• Link Intime India Private Ltd serves as the registrar.

Shiv Texchem IPO - Key Dates

The cut-off time for UPI mandate confirmation is 5:00 PM on 10th October 2024. This deadline is crucial for investors to ensure their applications are processed successfully. Investors are advised to complete their applications well before this deadline to avoid any last-minute technical issues or delays.

Shiv Texchem IPO Allocation & Minimum Investment Lot Size

Investors can place bids for a minimum of 800 shares, with additional bids required in multiples of this figure. The table below illustrates the minimum and maximum investment amounts for retail investors and HNIs, expressed in shares and monetary values.

SWOT Analysis: Shiv Texchem Ltd

Strengths:

• Differentiated business model with comprehensive and integrated retail and supply chain solutions
• Well-diversified product portfolio and customer base with extensive supplier network
• Long-standing and active relationships with customers
• Experienced, dedicated and qualified management team
• Focus on providing storage solutions

Weaknesses:

• Dependence on international suppliers for chemical procurement
• Exposure to foreign exchange rate fluctuations

Opportunities:

• Expansion of product portfolio and customer base
• Growing demand for chemicals in various industries
• Potential for geographical expansion within India

Threats:

• Volatility in chemical prices
• Regulatory changes affecting chemical imports
• Economic slowdowns impacting customer industries

Financial Highlights: Shiv Texchem Ltd

Below are the financial results for the Fiscal years FY24, FY23, and FY22:

Shiv Texchem Limited has shown significant growth in recent years. The company's revenue increased by 37%, and profit after tax (PAT) rose by 88% between the financial year ending on 31st March  2024 and 31st March 2023.

Assets have shown strong growth, increasing from ₹42,543.57 lakhs in FY22 to ₹79,868.05 lakhs in FY24, representing a growth of about 87.7% over two years.

Revenue has seen substantial growth, rising from ₹86,547.46 lakhs in FY22 to ₹1,53,668.79 lakhs in FY24, marking an impressive increase of 77.6% over two years.

The company's profitability has improved significantly. Profit After Tax increased from ₹1,386.48 lakhs in FY22 to ₹3,011.3 lakhs in FY24, representing a growth of 117.2% over two years.

Net Worth has shown strong growth, increasing from ₹10,673.68 lakhs in FY22 to ₹19,287.69 lakhs in FY24, a growth of about 80.7% over two years.

Total Borrowings have increased from ₹12,034.33 lakhs in FY22 to ₹29,665.25 lakhs in FY24, which represents an increase of about 146.5% over two years. However, there was a slight decrease in borrowings from FY23 to FY24.

The company's financial performance shows a trend of strong revenue growth and improving profitability. The substantial increase in Net Worth indicates a strengthening financial position. However, the significant increase in borrowings should be considered in the context of the company's growth strategy. Investors should evaluate these financial trends along with the company's market position and future growth prospects when considering the IPO.