Balaji Speciality Chemicals Limited IPO - Valuation, Date, Review & GMP

Balaji Speciality Chemicals Limited - Complete Overview

Established in 2010, Balaji Speciality Chemicals Limited stands as the sole producer of niche chemicals in India, encompassing significant substances like Ethylenediamine, Piperazine (Anhydrous), Diethylenetriamine, Amino Ethyl Ethanol Amines, and Amino Ethyl Piperazine, employing the Monoethanol Amine (“MEA”) process.

The company is a subsidiary of Balaji Amines Limited (“BAL”), a prominent manufacturer of aliphatic amines in India. The chemicals it manufactures are import substitutes and find application in various end-use industries such as speciality chemicals, agrochemicals, and pharmaceuticals.

The company's manufacturing facility is situated in Solapur, Maharashtra, extending across 41,920 square meters. As of March 31, 2022, the facility boasts an aggregate annual installed capacity of 30,000 MT.

In the fiscal year 2022, the company catered its products to a comprehensive customer base of 182, which encompasses speciality chemicals, agrochemicals, and pharmaceutical manufacturers, along with distributors facilitating further product distribution.

Key customers of Balaji Speciality Chemicals comprise notable names like Nanjing Union Chemical Company Limited, Korea India Limited, UPL Limited, Dr Reddy's Laboratories Limited, and Aarti Drugs Limited.

The company's operational revenue has showcased impressive growth, escalating from Rs.538.81 million in Fiscal 2020 to Rs.1,744.01 million in Fiscal 2021 and reaching Rs.5,142.80 million in Fiscal 2022.

 

What does the company do? 

Balaji Speciality Chemicals is a manufacturer in India of niche chemicals such as Ethylenediamine, Piperazine (Anhydrous), Diethylenetriamine, Amino Ethyl Ethanol Amines, and Amino Ethyl Piperazine, utilizing the Monoethanol Amine (“MEA”) process.

 

 

IPO Overview

The Balaji Speciality Chemicals Ltd. IPO is anticipated to list on the stock market on August 30, 2023. The IPO date is scheduled from August 18 to August 22, 2023.

The company has allocated 50% of its shares to institutional investors, 15% to non-institutional investors, and 35% to retail investors.

The IPO price for the offering has not been disclosed by the company.

 

Balaji Speciality Chemicals Limited IPO Timetable

EVENTS	DATE
IPO Opening Date	18 August 2023
IPO Closing Date	22 August 2023
IPO Allotment Date	25 August 2023
Refund initiation	28 August 2023
IPO Listing Date	30 August 2023

 

Balaji Speciality Chemicals Limited IPO Details

IPO Opening & Closing Date	18 August to 22 August 2023
Face Value	Rs. 2 per share
Issue Price	--
Lot Size	--
Price of 1 Lot	--
Issue Size	--
Offer for Sale	26,000,000 shares of Rs. 2 (aggregating up to Rs. [.] Cr)
Fresh Issue	[.] shares (aggregating up to Rs. 250.00 Cr)
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Link Intime India Pvt. Ltd.

 

Balaji Speciality Chemicals Limited IPO Lot Details 

Minimum Lot Investment (Retail)	--
Maximum Lot Investment (Retail)	--
Minimum Lot Investment (HNI)	--
Maximum Lot Investment (HNI)	--

 

Balaji Speciality Chemicals Limited IPO Reservation

Institution Portion	50%
Non-Institution Portion	15%
Retail Portion	35%

 

Company Financial

Amount in Crores

Period	FY 21	FY 22	FY 23
Total Assets	303.04	401.61	480.98
Total Revenue	175.88	516.04	798.74
PAT	10.40	108.95	178.14
Net Worth	78.53	187.48	365.55
Reserve & Surplus	38.53	147.48	325.55
Total Borrowings	204.41	166.64	--

 

Revenue Generated from Top Customers

(Amount in Million)

Customer Concentration	FY 20	FY 21	FY 22
Top 1	208.41	407.30	840.55
Top 3	275.77	810.52	2,108.61
Top 10	452.09	1,411.24	3,818.02

 

Information relating to raw materials suppliers of the company

(Amount in Million)

Supplier Concentration	FY 20	FY 21	FY 22
Top 1 (BAL)	334.36	791.52	780.35
Top 5	359.41	949.31	2,117.54
Top 10	366.84	979.67	2,488.52

 

Total Revenues Generated from the Sale of our Key Product

(Amount in Million)

Category	FY 20	FY 21	FY 22
Ethylenediamine	360.99	1,204.68	3,849.16
Piperazine	89.03	174.62	530.91
Diethylenetriamine	44.53	134.29	410.83
Amino Ethyl Ethanol Amines	2.99	18.36	60.40
Amino Ethyl Piperazine	0.04	1.65	28.05
Others	41.23	210.41	263.45
Total	538.81	1,744.01	5,142.80

 

Revenues from operations depending on the nature of end-use customers (including sales to distributors for onward sales to end-use customers)

(Amount in Million)

Category	FY 20	FY 21	FY 22
Speciality Chemicals	241.14	899.45	3,098.78
Agrochemicals	237.05	747.94	1,669.47
Pharmaceuticals	60.62	96.62	374.55
Total	538.81	1,744.01	5,142.80

 

Revenue from operation from key markets including  India and key export markets

(Amount in Million)

Category	FY 20	FY 21	FY 22
India	527.26	1,333.70	3,900.15
Key Export Markets	11.08	408.34	1.194.52
Other Export Markets	0.47	1.97	48.13
Total	538.81	1,744.01	5,142.80

 

Objective of the Issue

The company plans to allocate funds for the following purposes: 

• Repaying or pre-paying a portion or the entire outstanding borrowings obtained by the company.
• Meeting the working capital requirement.
• Addressing general corporate requirements.

 

Promoters and Management of Balaji Speciality Chemicals Limited

The key promoters of the company comprise the following people: Ande Prathap Reddy, aged 71, who serves as one of the Promoters and holds the position of Whole-time Director in the Company, Rajeshwar Reddy Nomula, aged 67, is another Promoter and currently holds the role of MD within the Company, Ram Reddy Dundurapu, aged 60, also stands as one of the Promoters and serves as a Whole-time Director, Gaddam Hemanth Reddy, aged 56, holds the position of Promoter and Whole-time Director and Ande Srinivas Reddy, aged 47, one of the Promoters.

Pre-issue Promoters Holding	97.98%
Post-issue Promoters Holding	--

 

Peer Comparison

Below are the companies listed as peers in the Balaji Speciality Chemicals DRHP.

Company Name	Total Revenue (in Rs.million)	EPS (Rs.)	P/E Ratio
Balaji Speciality Chemicals Limited	5,160.42	5.45	-
Clean Science and Technology Limited	7,148.59	21.51	74.81
Alkyl Amines Chemicals Limited	15,569.75	43.95	69.84
Tatva Chintan Pharma Chem Limited	4,425.41	44.59	52.61
Neogen Chemicals Limited	4,883.20	18.70	76.02

 

IPO's Valuations

The IPO valuation cannot be determined due to the company's lack of details regarding the issue price and P/E ratio.

 

Dividend Policy

The company has not paid any dividends in the past, and there is no guarantee that any dividends will be declared or paid in the future.

 

IPO's Strengths

• Extensive customer base.
• Experienced senior management team.
• Demonstrating growth in both financial and operational metrics.
• Sole manufacturer of niche chemicals in India, encompassing Ethylenediamine, Piperazine (Anhydrous), Diethylenetriamine, Amino Ethyl Ethanol Amines, and Amino Ethyl Piperazine, with notable export potential.
• Well-positioned to capture industry tailwinds.
• Swiftly cultivated a diverse clientele spanning global and domestic markets.
• Manufacturing facility with stringent quality norms and procedures.
• Capability to harness research and development competencies and strategic guidance from Balaji Amines Limited.

 

IPO Weaknesses 

• The company lacks long-term contractual agreements with customers.
• The company's success hinges on the strength of its customer relationships.
• The company has no long-term agreements with raw material suppliers.
• The company has a limited operational history.
• Restrictions on the import of raw materials and an increase in shipping costs may have an adverse impact on the business.
• The company depends on the sale of a few types of speciality chemicals.
• The company derives its revenue from operations in a limited number of markets.
• The company has a single manufacturing facility.
• The company is subject to stringent quality requirements, regular inspections, and audits.
• The company needs to comply with stringent environmental, health, and safety laws, regulations, and standards.
• The company is required to obtain, renew, or maintain statutory and regulatory permits, licenses, and approvals to operate its business.

 

 

IPO GMP Today

As on 11th Aug, 2023 the GMP of  Balaji Speciality Chemicals IPO is Rs. 55.

 

Conclusion

The upcoming IPO of Balaji Speciality presents a promising opportunity for investors. The company is exhibiting strong growth in its revenue and profit, and it holds the distinction of being the sole manufacturer of niche chemicals in India. After conducting a thorough analysis of all factors, investors can consider investing in this IPO for optimal outcomes.

 

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To Read the Prospectus of the Company Click Here to Download the DRHP

 

 

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