Archean Chemical Industries Ltd IPO

Upcoming

IPO Synopsis

Archean Chemical Industries, a speciality marine chemical manufacturer, has filed its preliminary papers with SEBI to raise funds worth between Rs.2,000 crores - Rs.2,200 crores via an initial public offer.
The issue consists of a fresh issue of equity shares aggregating up to ₹1,000 crore and an offer for sale of up to 1.9 crore shares by the promoter and investors, including the India Resurgence Fund, a joint venture between the Piramal Group and Bain Capital. 
IIFL Securities, ICICI Securities Ltd and JM Financial are the lead managers to the issue.

Objective of the Issue
The proceeds from the Rs.800-crore issue will be used to redeem non-convertible debentures fully or partly. This move will reduce the company's outstanding indebtedness, debt servicing costs, improve the debt-to-equity ratio and enable utilisation of its internal accruals for further investment in business growth and expansion.
 

About Archean Chemical Industries Ltd

Archean Chemicals Industries is a leading specialty marine chemical manufacturer in India and focused on producing and exporting bromine, industrial salt, and sulphate of potash to customers around the world. It produces its products from its own brine reserves in the Rann of Kutch, located on the coast of Gujarat, and manufactures its products at its facility near Hajipir in Gujarat.
The key geographies for exports include China, Japan, South Korea, Qatar, Belgium and the Netherlands. Some of the major customers include Sojitz Corporation, which is also a shareholder in our Company, Shandong Tianyi Chemical Corporation, Unibrom Corporation, Wanhau Chemicals and Qatar Vinyl Company Limited
The bromine produced by Archean is used as key initial level material, which has applications in pharma, agrochemicals, water treatment, flame retardant, additives, oil & gas and energy storage segments.
Industrial salt is an important raw material used in the chemical industry for the production of various other chemicals and compounds and sulphate of potash is used as a fertilizer and also has medical uses to reduce the plasma concentration of potassium when hypokalaemia occurs.

Profit and Loss

Balance Sheet

Particulars (in Rs. Crores) FY21 FY20 FY19
Revenue 740.8 608.2 565.5
EBITDA 276.3 156.8 194.3
PAT 66.6 -36.2 40.0
Particulars (in Rs. Crores) FY21 FY20 FY19
Total Assets 1432.4 1428.6 1260.5
Share Capital 19.3 19.3 19.3
Total Borrowings 978.8 929.3 772.0
Particulars (in Rs. Crores) FY21 FY20 FY19
Net cash generated from / (used in) operating activities 119.10 147.55 316.21
Net cash from / (used in) investing activities -1.75 -196.67 -24.86
Net cash flow from / (used in) financing activities -110.32 26.36 -256.34
Net increase (decrease) in cash and cash equivalents 7.03 -22.76 35.02

Peer Comparison

Name of the Company Total Revenue Basic EPS Nav Rs. per share PE RoNW%
Archean Chemical Industries Limited 754.8 6.45 7.01 NA 92.0%
Tata Chemicals Limited 10434.2 10.06 560.93 89.15 1.8%
Deepak Nitrite Limited 4381.3 56.88 172.05 36.66 33.1%
Aarti Industries Limited 4506.8 30.04 201.05 32.45 14.9%
Neogen Chemicals Limited 336.6 13.45 78.43 114.36 17.1%


The key points are-

Key Points

  • Strengths

    1. Leading market position, expansion and growth in bromine and industrial salt
    2. High entry barriers in the specialty marine chemicals industry
    3. Established infrastructure and integrated production with cost efficiencies 
    4 Largest Indian exporter of bromine and industrial salt with global customer base

  • Risks

    1. Slowdown or shutdown in the manufacturing operations or strikes, work stoppages or increased wage demands by the employees 
    2. Non-compliance with and changes in, safety, health, environmental and labour laws and other applicable regulations
    3. Unsuccessful development of new bromine derivative products or continuation of product portfolio expansion in a timely and cost-effective
    4. Reliance on three principal products for substantially growth of sales could have an adverse effect on our business. 
    5. The manufacturing facilities are located only in Gujarat, hence the operations are exposed to geographic risks such as weather and natural occurrences as well as regulatory, economic, demographic and other changes in Gujarat
    6. The company is dependent on third party transportation and logistics service providers thus any increase in the charges of these entities could adversely affect the financial condition

How to apply for an IPO?

  • Login to your 5paisa account and select the issue in the current IPO section

  • Enter the number of lots and price at which you wish to apply for

  • Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange

  • You will receive a mandate notification to block funds in your UPI app

  • Approve the mandate request on your UPI and funds will be blocked

FAQs

What is the minimum lot size and investment required for the Archean Chemical Industries IPO?

Archean Chemical Industries IPO details are yet to be announced.

What is the price band of the IPO?

Archean Chemical Industries IPO details are yet to be announced.

When does the Archean Chemical Industries issue open and close?

Archean Chemical Industries IPO details are yet to be announced.

What is the size of Archean Chemical Industries IPO issue?

The issue consists of a fresh issue of equity shares aggregating up to ₹1,000 crore and an offer for sale of up to 1.9 crore shares by the promoter and investors.

Who are the promoters/key personnels of Archean Chemical Industries?

Archean Chemical Industries is promoted by Chemikas Speciality LLP, Ravi Pendurthi and Ranjit Pendurthi.

When will the Archean Chemical Industries allotment happen?

Archean Chemical Industries IPO details are yet to be announced.

What is the Archean Chemical Industries listing date?

Archean Chemical Industries IPO details are yet to be announced.

Who are the book runners for Archean Chemical Industries IPO?

IIFL Securities, ICICI Securities Ltd and JM Financial are the book running lead managers to the issue.

What is the objective of the issue?

The proceeds from the Rs.800-crore issue will be used to redeem non-convertible debentures fully or partly.

How to apply for the Archean Chemical Industries IPO?

1. Login to your 5paisa account and select the issue in the current IPO section
2. Enter the number of lots and price at which you wish to apply for
3. Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange
4. You will receive a mandate notification to block funds in your UPI app

Open Demat Account