Chemkart India Makes Flat Listing Debut with 0.8% Premium Amid Strong Fundamentals

The food and health ingredients distributor, Chemkart India Limited, made a subdued debut on the BSE SME platform on July 14, 2025. After closing its IPO bidding between July 7 - July 9, 2025, the company commenced trading with a minimal 0.8% premium to its issue price, aligning closely with pre-IPO expectations and reflecting cautious investor sentiment despite strong financial performance in the health supplement distribution sector.

Chemkart India Listing Details

Chemkart India Limited launched its IPO at ₹248 per share with minimum investment of 1,200 shares costing ₹2,97,600. The IPO received strong response with subscription of 5.91 times - QIB segment leading at impressive 13.69 times, NII at 5.64 times, whilst retail participation remained moderate at 1.63 times, reflecting institutional confidence in the business model.

Listing Price: The Chemkart India share price opened at ₹250 on BSE SME, representing a premium of 0.8% from the issue price of ₹248, delivering modest gains for investors and closely matching pre-IPO expectations of ₹3 or 1.2% over issue price.

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First-Day Trading Performance Outlook

Chemkart India delivered restrained debut performance with minimal premium reflecting selective investor confidence in health ingredient companies despite strong fundamentals. The company, incorporated in 2015, operates as a B2B distributor specialising in high-quality food and health ingredients, bridging global manufacturers with businesses across various sectors through its 28,259 sq. ft. facility in Bhiwandi, Mumbai, offering grinding, blending, and packaging services with 40 employees.

Growth Drivers and Challenges

Growth Drivers:

• Growing Health Supplement Market: Positioned to benefit from increasing health consciousness and demand for sports nutrition, vitamins, and protein supplements driving B2B ingredient requirements
• Diversified Product Portfolio: Comprehensive range across amino acids, herbal extracts, nucleotides, vitamins, and sports nutrition ingredients serving multiple industry segments
• In-House Processing Capabilities: Modern facility with grinding, blending, and packaging services providing value-added services and margin enhancement opportunities
• Strong Financial Performance: Revenue growth of 55% and PAT growth of 67% in FY25 with exceptional ROE of 59% demonstrating operational excellence

Challenges:

• Highly Competitive Market: Operating in fragmented health ingredient distribution segment with established players requiring continuous margin management
• Distribution Model Dependency: Business reliant on supplier relationships and customer acquisition in competitive B2B environment limiting pricing power
• Working Capital Intensive: Distribution business requiring significant inventory management and credit extension affecting cash flow dynamics
• Modest Listing Response: Flat listing performance despite strong financials suggests market concerns about valuation and growth sustainabilit

Utilisation of IPO Proceeds

• Manufacturing Facility Setup: ₹34.68 crore for establishing manufacturing facility through wholly-owned subsidiary Easy Raw Materials Private Limited enhancing value chain integration 
• Debt Repayment: ₹20.00 crore for repayment of outstanding borrowings improving capital structure and reducing financial leverage 
• General Corporate Purposes: Remaining funds for strategic initiatives and operational requirements supporting business expansion

Financial Performance of Chemkart India

Revenue:₹205.46 crore for FY25, showing impressive 55% growth from ₹132.83 crore in FY24, reflecting strong demand for health ingredients and operational expansion.

Net Profit: ₹24.26 crore in FY25, demonstrating exceptional 67% growth from ₹14.52 crore in FY24, with consistent profitability improvement trajectory over three years.

Financial Metrics: Outstanding ROE of 59%, strong ROCE of 49%, moderate debt-to-equity of 0.32, healthy EBITDA margin of 16.12%, and market capitalisation of ₹300.06 crore post-listing.

Chemkart India represents a solid investment opportunity in the health ingredients distribution sector with modest listing performance delivering 0.8% premium backed by strong subscription response of 5.91 times. Despite concerns over competitive market dynamics and distribution model challenges, the company's diversified product portfolio, in-house processing capabilities, and exceptional financial performance provide steady growth potential in India's expanding health supplement market, though the restrained listing suggests investors remain cautious about premium valuations in distribution businesses.