Sigachi Industries IPO - 7 Things to Know
The Sigachi Industries IPO Ltd opens on 01-November in the midst of an extremely busy season for primary markets. Sigachi Industries Ltd is a key player in the manufacture of Microcrystalline Cellulose (MCC), which is a widely used excipient used in the finished dosages of formulations in the pharmaceutical industry. Here is a gist of the IPO.
Here are 7 things you need to know about the Sigachi Industries Ltd IPO
1) The product profile of Sigachi Industries Ltd includes MCC of various grades ranging from 15 microns to 250 microns. It currently manufactures 59 different grades of microns across its plants in Hyderabad and in Gujarat.
While one unit is located in Hyderabad, the other two are located in Jhagadia and Dahej in Gujarat.
2) The Sigachi Industries IPO will open on 01-November and close for subscription on 03-November 2021. The IPO price band has been fixed in the range of Rs.161 to Rs.163 with a minimum market lot of 90 shares.
3) The IPO is entirely a fresh issue and there is no OFS component in the IPO. The IPO of Sigachi Industries Ltd will entail the issue of 76.95 lakh shares and at the upper end of the price band of Rs.163, it works out to an issue size of Rs.125.43 crore.
4) The allotment for the IPO will be completed on 10-November while the refunds will be initiated on 11-November. While the shares will be credited to the respective demat accounts on 12-November, the stock will get listed on the NSE and the BSE on the 15th of November.
5) The company is an existing profit making and has been consistently profitable in all the three previous fiscal years. For FY21, Sigachi Industries Ltd reported net profits of Rs.30.26 crore on revenues of Rs.143.95 crore.
That translates into a healthy net profit margin of 21.16% for FY21. It has also reported profits of Rs.9 crore in Jun-21 quarter.
6) Sigachi Industries Ltd has the advantages of an entrenched position in the manufacture of MCC, a long standing market presence, long term and deep relationships with customers, and key strategic locations of its manufacturing plants in proximity to the major demand pockets.
7) The funds raised by Sigachi Industries Ltd in the IPO would be largely utilized for expanding its footprint. For example, Rs.29 crore would be used to expand MCC capacity at Dahej plant while Rs.30 crore will be used to expand MCC capacity at Jhagadia unit.
Another Rs.33cr will be allocated to manufacture CCS at the proposed unit.
The MCC market is a huge market in India and globally and is likely to keep the demand for the products of Sigachi Industries Ltd ticking.
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