Gujarat-based pharma chemical company Tatva Chintan Pharma Chem will head to the IPO market on July 16 to raise Rs 500 crore. The company is raising the funds to support its expansion plans and for other needs.
The company believes it will enjoy strong growth in the future due to its leadership position in structure-directing agents (SDAs), phase transfer catalysts (PTCs), electrolyte salts for super capacitor batteries.
The company has two facilities -- one in Ankleshwar and Dahej -- both are close to Hazira port. The location of the facilities is important for the company as its major portion of revenue comes from export -- 70 per cent of revenue from export and 30 per cent revenue from India. Speaking to The Free Press Journal, Chintan Shah, Managing Director, Tatva Chintan Pharma Chem said, "We are in the catalyst space which many specialty chemicals are not in. This will enable us to grow."
It is the second-largest manufacturer of SDAs for Zeolities in the world and is the largest producer in PTC in India. There are hardly any companies in the electrolyte salts business. "And we are the largest producer there in the country," Shah added. The company was able to grow in this space further mainly due to its focus on sustainability and many Chinese firms could not adhere to those standards set by many multi-national companies.
Its clients include Merck, Bayer, Firmenich, Asian Paints, Otsuka, Divis Laboratories, Laurus Laboratories and others. It has over 300 clients every year, Shah added. "The top 10 customers generated 59.99 per cent of total revenue from operations in FY 2021," the company stated. Other than clients in India, it has clients in more than 25 countries, including the USA, China, Germany, Japan, South Africa, and the UK.
The company is looking at many opportunities due to its focus on the green chemistry process. Shah added that with more and more solar companies looking at developing quality storage options, the companies electrolyte salts business will have more opportunities due to this.
The total revenue of the company grew at a CAGR of 21.70 per cent in the last three years. The EDITBA margin of the company grew at a CAGR of 44.52 per cent in the last three years. The EDITBA margin of the company stood at Rs 71.6 crore, Rs 56.3 crore and Rs 34.3 crore in FY 2021, FY 2020 and FY 2019.
The IPO will close on July 20. The price band for the IPO will be Rs 1,073-1,083 per share. The company will issue fresh equity shares worth Rs 225 crore and offer for sale by promoters and shareholders worth Rs 275 crore.