Archean Chemical IPO | Review

Spread the love

Archean Chemical Industries Limited has come up with an initial public offer (IPO). It will open on November 09-11, 2022 at Rs.386-407 a share. The IPO issue size is around Rs.1,462.31 crore. The minimum bid will be for 36 shares and in its multiples thereafter.

Overview

Archean Chemical Industries Limited is a leading specialty marine chemical manufacturer in India. It focused on producing and exporting bromine, industrial salt, and sulphate of potash to customers around the world. The company is the largest exporter of bromine and industrial salt by volume in India in Fiscal 2021 and has amongst the lowest cost of production globally in both bromine and industrial salt. It has marketed products to 18 global customers in 13 countries and to 24 domestic customers.

The company’s marine chemicals business is predominantly conducted on a business-to-business basis both in India and internationally. It exports products to China, Japan, South Korea, Qatar, Belgium and the Netherlands. Company has an integrated production facility for bromine, industrial salt, and sulphate of potash operations, located at Hajipir, Gujarat.

Website – https://www.archeanchemicals.com/

Promoters

Chemikas Speciality LLP – 38.21%	Ranjit Pendurthi – 25.81%
Ravi Pendurthi – 1.56%

Promoter Holding

Pre-Issue Shareholding – 65.58%

Post-Issue Shareholding – 55.04%

Strength & Weakness

Leading market position in bromine and industrial salt	Business is dependent on manufacturing facility
High entry barriers in the specialty marine chemicals industry	Reliance on three principal products for substantially
Established infrastructure	Debt restructured in previous years
Integrated production with cost efficiencies	Exchange rate fluctuations
Focus on environment and safety	Doesn’t have long-term agreements with supplier
Largest Indian exporter of bromine and industrial salt	Significant part of revenue from major customers
Strong and consistent financial performance	Require various licenses and approvals
Experienced management team	Faces stiff competition
Continue to build global customer base and enter new geographical markets	Dependent on 3rd party transportation and logistics service providers

Products

Bromine

Industrial Salt

Sulphate of Potash

Customers

Unibrom Corp	Chinese Trading company
Chinese Chemical Company	Shandong Tianyi Chemical Corp
Sojitz Corporation	Indian trading company
Wanhua Chemical

Competitors

Tata Chemicals Limited	Deepak Nitrite Limited
Aarti Industries Limited	Neogen Chemicals Limited

Company Financials

Year	Revenue (in Crore)	Profit (in Crore)
31-Mar-2020	608.17	36.22
31-Mar-2021	740.76	66.61
31-Mar-2022	1,130.44	188.58
30-Jun-2022	400.27	84.41

Object of Issue

1) The Selling Shareholders will be entitled to their respective portion of the proceeds of the Offer for Sale

2) Redemption or earlier redemption, in part or full, of NCDs issued by our Company

3) General corporate purposes

Archean Chemical IPO Lot Size

Application	Lot	Shares	Amount
Retail (Min)	1	36	Rs.14,652
Retail (Max)	13	468	Rs.1,90,476
S-HNI (Min)	14	504	Rs.2,05,128
B-HNI (Max)	69	2,484	Rs.10,10,988

Archean Chemical IPO Details

IPO Opening Date	November 09, 2022
IPO Closing Date	November 11, 2022
Face Value	Rs.2 per Equity Share
IPO Price	Rs.386-407 per share
Market Lot	36 shares
Minimum Order Quantity	36 shares
Listing At	NSE, BSE
No. of shares (Fresh Issue)	1,97,78,870 shares
No. of shares (OFS)	1,61,50,000 shares
Issue Size	Up to Rs.1,462.31 Crore
QIB Shares Offered	75% of the offer
Retail Shares Offered	10% of the offer
NII/HNI Shares Offered	15% of the offer

Archean Chemical IPO Timetable

IPO Date	November 09-11, 2022
Allotment Date	November 16, 2022
Initiation of Refunds	November 17, 2022
Credit of share to Demat a/c	November 18, 2022
IPO Listing Date	November 21, 2022