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Balaji Speciality Chemicals IPO

  • Status: Upcoming
  • RHP:
  • - / - shares

    Minimum Investment

IPO Details

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  • Close Date

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IPO Timeline

Last Updated: 05 September 2023 12:43 PM by 5Paisa

Balaji Speciality Chemicals Limited IPO is all set to open. Balaji Speciality Chemicals is involved in the business of manufacturing ethylamine, methylamines, derivatives of specialty chemicals, and pharma excipients. The IPO includes a fresh issue of ₹250 cr and an Offer-for-Sale (OFS) of 26,000,000 equity shares. The price band and lot size are yet to be decided.    

HDFC Bank Limited and JM Financial Limited are the book-running lead managers for this IPO, while Link Intime India Private Limited is the registrar. 

Objectives of Balaji Speciality Chemicals IPO

Balaji Speciality Chemicals Limited plans to utilize the raised capital from IPO to:

●    The prepayment or repayment of either a full amount or a part of outstanding debt
●    Fund working capital requirements 
●    Fund general corporate purposes

Established in 2010, Balaji Speciality Chemicals Limited is a prominent manufacturer of specialized chemicals like Ethylenediamine, Piperazine (Anhydrous), Diethylenetriamine, Amino Ethyl Ethanol Amines, and Amino Ethyl Piperazine. These chemicals are produced using the Monoethanol Amine (“MEA”) process and serve as domestic alternatives to imported substances in diverse industries such as specialty chemicals, agrochemicals, and pharmaceuticals. The company’s production hub is situated in Solapur, Maharashtra and serves as the manufacturing epicentre for all its product lines.

Balaji Speciality Chemicals has a client base comprising 182 customers, which include manufacturers of specialty chemicals, agrochemicals, and pharmaceuticals, as well as distributors who further distribute these products within these industries. Some notable clientele include Nanjing Union Chemical Company Limited, Korea India Limited, UPL Limited, Dr. Reddy’s Laboratories Limited, and Aarti Drugs Limited. 

Balaji Speciality Chemicals operates as a subsidiary of Balaji Amines Limited (“BAL”), a leading figure in the Indian aliphatic amines manufacturing sector.

Peer Comparison
●    Clean Science and Technology Limited
●    Tatva Chintan Pharma Chem Limited
●    Alkyl Amines Chemicals Limited
●    Neogen Chemicals Limited
 

Profit and Loss

Balance Sheet

Particulars (in Rs. Crores) FY22 FY21 FY20
Revenue 514.28 174.40 53.88
EBITDA 180.62 43.83 0.43
PAT 108.94 10.39 -15.87
Particulars (in Rs. Crores) FY22 FY21 FY20
Total Assets 401.61 303.04 304.24
Share Capital 40.00 40.00 40.00
Total Liabilities 214.13 224.51 236.11
Particulars (in Rs. Crores) FY22 FY21 FY20
Net cash generated from / (used in) operating activities 54.21 18.43 -12.22
Net cash from / (used in) investing activities -0.26 0.10 -9.69
Net cash flow from / (used in) financing activities -52.50 -18.06 23.37
Net increase (decrease) in cash and cash equivalents 1.457 0.46 1.456


Strengths

1.    The company is the sole producer of specialized chemicals within India, for compounds like Ethylenediamine, Piperazine (Anhydrous), Diethylenetriamine, Amino Ethyl Ethanol Amines, and Amino Ethyl Piperazine.
2.    Well-positioned in the industry.
3.    There is no effective substitute for the company’s products in the end-use industries.
4.    National and global client portfolio. 
5.    Capacity to utilize research and development proficiency along with strategic direction provided by Balaji Amines Limited.
6.    Improvement in market share and profitability. 
 

Risks

1.    No long-term contracts with customers or suppliers. 
2.    Limited operating history with loss reported in the past. 
3.    Any restrictions on import materials or increases in shipping costs can affect its profitability. 
4.    The company’s share of selling Ethylenediamine is at 67%, thus, any change in its demand can impact its bottom line. 
5.    Subject to strict regulations by the government.

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