Deepak Chemtex Limited IPO (Deepak Chemtex IPO)

Deepak Chemtex IPO, a book-built issue with a size of Rs. 23.04 crores, comprises an entirely fresh issue of 28.8 lakh shares. The subscription for this IPO opens on November 29, 2023, and concludes on December 1, 2023. The allotment for the IPO is anticipated to be finalized on Wednesday, December 6, 2023. The listing of Deepak Chemtex IPO is scheduled on BSE SME, tentatively set for Monday, December 11, 2023.

The IPO’s price band is established between Rs. 76 to Rs. 80 per share. The minimum lot size for application stands at 1600 shares, requiring a minimum investment of Rs. 128,000 for retail investors. For High Net Worth Individuals (HNIs), the minimum lot size is 2 lots (3,200 shares), amounting to Rs. 256,000.

Hem Securities Limited functions as the book running lead manager for the Deepak Chemtex IPO, overseeing the issue’s management, while Bigshare Services Pvt Ltd acts as the registrar, handling the issue’s registry. Hem Finlease serves as the market maker for the Deepak Chemtex IPO.

For more comprehensive and detailed information about Deepak Chemtex IPO, interested parties are encouraged to refer to the IPO’s Red Herring Prospectus (RHP).

The details for the Deepak Chemtex Limited IPO are as follows:

IPO Date: November 29, 2023, to December 1, 2023

Listing Date: Yet to be announced

Face Value: Rs.10 per share

Price Band: Rs. 76 to Rs. 80 per share

Lot Size: 1600 Shares

Total Issue Size: 2,880,000 shares (aggregating up to Rs. 23.04 Cr)

Fresh Issue: 2,880,000 shares (aggregating up to Rs. 23.04 Cr)

Issue Type: Book Built Issue IPO

Listing At: BSE SME

Shareholding Pre-Issue: 7,984,000

Shareholding Post-Issue: 10,864,000

Market Maker Portion: 147,200 shares

The IPO will be open for subscription from November 29, 2023, to December 1, 2023. The listing date is yet to be confirmed. The shares have a face value of Rs. 10 per share and are being offered in the price band of Rs. 76 to Rs. 80 per share, with a lot size of 1600 shares. The IPO constitutes a total issue size of 2,880,000 shares, all as a fresh issue. Upon the IPO, the post-issue shareholding will stand at 10,864,000 shares.

The IPO is categorized as a Book Built Issue and is set to be listed on the BSE SME platform. Additionally, a portion of 147,200 shares is reserved for the Market Maker.

The key performance indicators (KPIs) for the Deepak Chemtex Limited IPO

P/E (x): 10.14

Post P/E (x): 13.96

Market Cap (Rs. Cr.): Rs. 86.91

Return on Equity (ROE): 50.27%

Return on Capital Employed (ROCE): 49.65%

Debt/Equity Ratio: 0.09

Earnings Per Share (EPS): Rs. 7.89

Return on Net Worth (RoNW): 40.17%

These KPIs provide insights into Deepak Chemtex’s financial performance and valuation metrics. The P/E ratio (10.14) and Post P/E ratio (13.96) reflect the company’s price-to-earnings multiples, indicating investor sentiment regarding its earnings and growth potential. The Market Cap of Rs. 86.91 Crores signifies the market value of the company’s outstanding shares.

Moreover, strong financial metrics such as ROE (50.27%), ROCE (49.65%), and RoNW (40.17%) indicate the company’s efficiency in generating profits relative to its equity and capital employed. The Debt/Equity ratio of 0.09 suggests a low level of debt compared to equity, signifying a favorable financial structure.

The EPS of Rs. 7.89 showcases the company’s earnings attributable to each outstanding share. These KPIs collectively offer a comprehensive overview of Deepak Chemtex’s financial health, profitability, and valuation, aiding investors in evaluating the IPO for potential investment opportunities.

Grey Market Premium (GMP) Deepak Chemtex Limited

The Grey Market Premium (GMP) for Deepak Chemtex SME IPO, as of the latest update on November 28th, 2023, stands at Rs. 28, indicating positive market sentiment. Considering the IPO’s price band of Rs. 80.00, the estimated listing price for Deepak Chemtex SME IPO is projected at Rs. 108 (cap price + today’s GMP). This suggests an expected percentage gain/loss per share of approximately 35.00% upon listing.

Moreover, the retail subject to Sauda for Deepak Chemtex SME IPO is noted at Rs. 34,000, showcasing considerable interest among retail investors.

Based on the daily updates in the grey market over the last 7 sessions, the IPO’s GMP has displayed an upward trend, indicating strong anticipation for a robust listing. The GMP fluctuates between Rs. 12 as the lowest point and Rs. 28 as the highest, reflecting dynamic market sentiments.

For the most current information and to track the daily price trend of Deepak Chemtex SME IPO GMP along with the expected listing price, investors are encouraged to stay updated with the ongoing market movements and trends.

This table organizes the Deepak Chemtex Day-wise IPO GMP Trend information, including the GMP Date, IPO Price, GMP movement, Sub2 Sauda Rate, Estimated Listing Price, and Last Updated details for each respective date.

Deepak Chemtex Limited Company Profile

Deepak Chemtex Limited, established in 1997, specializes in the manufacturing of colorants catering to a diverse array of industries including Food, Drug, Cosmetics, Cleaning compounds, Agriculture, and others. The company’s product range comprises FDC (Food, Drug, and Cosmetic) colors essential in confectionary, bakery items, beverages, pharmaceuticals, and personal care products. Additionally, it produces salt-free dyes for inkjet applications, pond dyes, and various colorants utilized in multiple sectors like automotive, sanitation, cleaning, agriculture, fuel, and more.

Situated in Ratnagiri District, Maharashtra, Deepak Chemtex operates a state-of-the-art manufacturing facility with a robust production capacity exceeding 1200 metric tonnes annually. The facility boasts advanced equipment such as glass-lined reactors, boilers, and stainless steel apparatuses, maintaining stringent adherence to quality standards. Regular audits by clients from the USA and EU underscore its commitment to quality. The plant holds accreditations including ISO 9001:2015, HALAL, ensuring compliance with Islamic dietary laws, and KOSHER certifications affirming adherence to Jewish Dietary Laws.

With an extensive portfolio comprising over 100 products, Deepak Chemtex’s global footprint spans across various countries including China, France, Kenya, Mexico, Europe, Japan, Australia, the United Kingdom, and the United States. The company’s commitment to quality, adherence to diverse international standards, and a comprehensive product range contribute to its global presence and market reach across multiple sectors.

Deepak Chemtex Limited  IPO Lot Size and Investment Criteria

Investors can bid for a minimum of 1600 shares and in multiples thereof.

The table below showcases the minimum and maximum investment allowed by retail investors and High Net Worth Individuals (HNI) in terms of shares and the corresponding amounts:

Application Details:

Retail investors can apply for a minimum of 1600 shares (1 lot), with an investment of Rs. 128,000. The maximum investment remains the same for retail investors, capped at 1600 shares or Rs. 128,000.

For High Net Worth Individuals (HNI), the minimum application size starts at 2 lots, which equals 3200 shares, requiring an investment of Rs. 256,000.

Deepak Chemtex Limited  IPO Financial Performance Comparison:

Assets: Showed a consistent upward trend, reaching Rs. 2,820.64 Lakhs by September 30, 2023, from Rs. 1,715.17 Lakhs as of March 31, 2022.

Revenue: Declined to Rs. 2,212.95 Lakhs by September 30, 2023, from Rs. 5,443.68 Lakhs recorded on March 31, 2022, indicating a significant decrease.

Profit After Tax (PAT): Demonstrated a rise to Rs. 311.18 Lakhs by September 30, 2023, from Rs. 423.10 Lakhs in the prior fiscal year ending March 31, 2022, marking a positive growth of 49.14%.

Net Worth: Displayed an upward trend, increasing to Rs. 1,879.90 Lakhs by September 30, 2023, compared to Rs. 938.43 Lakhs in the preceding fiscal year.

Reserves and Surplus: Showed a growth trend, reaching Rs. 1,081.50 Lakhs by September 30, 2023, from Rs. 888.53 Lakhs as of March 31, 2022.

Total Borrowing: Declined to Rs. 120.78 Lakhs by September 30, 2023, from Rs. 199.49 Lakhs recorded on March 31, 2022.

Objectives of the Deepak Chemtex Limited  IPO

Funding Capital Expenditure: The company plans to allocate funds towards installing plant and machinery within its existing premises. This investment aims to enhance production capabilities and infrastructure.

Investment in Subsidiary: Deepak Chemtex intends to use a portion of the proceeds to financially support its subsidiary, DCPL Speciality Chemicals Private Limited. This subsidiary will utilize the funds for its own capital expenditure, primarily directed towards the installation of plant and machinery. This investment aims to bolster the subsidiary’s operational capacities.

Meeting Working Capital Requirements: A portion of the proceeds will be directed towards meeting the company’s working capital needs. This allocation intends to ensure smooth day-to-day operations by facilitating liquidity for inventory, operational expenses, and other short-term obligations.

General Corporate Purpose: Additionally, a part of the proceeds will be utilized for general corporate purposes. This category typically covers various operational expenses, potential future expansions, marketing initiatives, and other routine business needs.

These outlined objectives reflect the company’s strategic plans to strengthen its operational capabilities, support subsidiary growth, manage working capital effectively, and foster overall corporate development in line with its expansion and growth strategies.