Tatva Chintan Pharma IPO is launched for subscription today on Friday 16, July 2021, and will be available for subscription till Tuesday, July 20, 2021.
The company is looking to raise Rs.500 crore through public issue which includes fresh issuance of shares equity shares worth Rs 225 crore and an offer of sale(OFS) of Rs 275 crore by existing promoters and shareholders.
The Tatva IPO received a terrific response from the investors, as it was fully subscribed within the first one hours of the first bidding day on launched day itself (Friday). As of 3 pm, the issue got subscribed at 4.50x times in retail category.
Whereas, the Qualified Institutional Buyers (QIBs) portion was subscribed 0.02x times, and Non Institutional Investors (NIB) was subscribed 0.35x.
Ahead of the Tatva IPO, It has decided to allocate 13,85,040 equity shares at at the upper end of the price band of Rs 1,083 per share to anchor investors, aggregating the transaction size to Rs 150 crore.
The anchor list for Tatva IPO included Goldman Sachs India Ltd, Abu Dhabi Investment Authority, Aberdeen Standard Asia Focus Plc, Malabar India Fund Ltd, Axis Mutual Fund (MF), ICICI Prudential MF, HDFC MF, SBI MF, Aditya Birla Sun Life MF and SBI Life Insurance.
The equity shares of Tatva Chintan Pharma Chem Limited are proposed to be listed on both BSE and NSE.
The Tatva Pharma IPO issue will be sold in the price band of Rs 1073-1083 per share and the minimum lot quantity is 13 shares and in multiples thereof translating to a minimum investment of Rs 14,079 at upper end.
The latest Grey market premium price (GMP) for Tatva Chintan Pharma IPO were seen up by more than 67.8% and were trading around Rs.720-745 as of today, This means people are expecting it to open on listing day to be at least at Rs.1700 or more.
Having said that GMP does not mean in anyway a recommendation for an IPO, the financials of a company and its future prospectus tells a lot.
Here is the thing no one can tell you whether the IPO will going to make a stellar debut or not, it is you who have to decide based on available information about the company.
Moreover the IPO’s now a days are very hot market every one wants to earn some quick money on listing day itself and there is nothing wrong about it.
One must not forget to check the financials and do not fall for any recommendation from anyone, it is you hard earned money, you should decide whether to opt for the IPO or not.
You may have watch various YouTube channels or read on different websites about recommendation for stocks and IPO, it is my humble suggestion and request please do not ever fall prey to it. Better than this is to invest in ETF’s?.
Therefore, whenever you are buying IPO make sure the money invested is not the one which you my need it urgently, always use extra money which you may not require in near future, Otherwise stay away completely.
Now, coming back to the Tatva Chintan Pharma Chem IPO let us talk about in brief about the company and its financials and other details step by step.
About Tatva Chintan Pharma Chem Ltd:
Incorporated in 1996, Tatva Chintan is a specialty chemicals manufacturing company engaged in the manufacture of a diverse portfolio of structure directing agents (SDAs), phase transfer catalysts (PTCs), electrolyte salts for super capacitor batteries and pharmaceutical and agrochemical intermediates and other specialty chemicals (PASC).
Apart from customers in India, the company also exports products to over 25 countries, including the US, China, Germany, Japan, South Africa, and the UK. As on March 31, 2021, it manufactured over 154 products.
The company is the largest and only commercial manufacturer of SDAs for zeolites in India. It also enjoys the second largest position globally.
In addition, it is one of the leading global producers of an entire range of PTCs in India and one of the key producers across the globe.
PTCs are catalysts that are used in chemical processes to eliminate unsafe elements, increase yield and minimise wastage. Whereas SDAs are made through forward integration of PTCs and helps in forming particular channels and pores during the synthesis of zeolites.
Zeolites are microporous minerals used as commercial adsorbents. The company’s products have application in green chemistries wherein chemical processes are undertaken in an environmentally friendly manner.
These products find their end-use in industries such as automotive, petroleum, pharmaceutical, agrochemicals, paints, and others.
During FY19, FY20, and FY21, exports of products were Rs.144 crore, 202 crore and 212 crore, which accounted for 69.57%, 76.74% and 70.58%, of revenue from operations, respectively.
The company currently operates through two manufacturing facilities in Ankaleshwar and Dahej in Gujarat, both of which are strategically located very close to the Hazira port.
These manufacturing facilities have an annual installed reactor capacity of 280 KL and 17 Assembly Lines, respectively, as on March 31, 2021.
The company counts significant players such as Merck, Bayer AG, Asian Paints, and others as its customers and derives around 70% of its revenue from exports.
The company has consistently invested in R&D capabilities and technologies and has successfully implemented most of them based on market/customer demand at manufacturing facilities over the years.
Let us now move on to know the financials aspects of Tatva Chintan Pharma Chem Ltd.
Financials Of Tatva Chintan Pharma Chem Ltd:
Tatva Chem has reported positive cash flows from operations in the last three years. The company’s revenue increased by 30.4% CAGR in the last three years.
For the fiscal ended March 31, 2020, the company posted a profit of Rs 37.78 crore as compared to Rs 20.54 crore in the preceding financial year, while it reported a revenue of Rs 263.23 crore against Rs 206.3 crore.
At Rs. 1083 (upper band), the stock is priced at 45.9x FY21 consolidated EPS. The three-year average ROE and ROCE stood at 29.8 and 24.5%, respectively.
The current ROE and ROCE stood at 31.5 and 26.8%, respectively, in FY21. Tatva’s net debt-to-equity ratio stands at 0.18 times on post-IPO equity basis.
The company’s short-term borrowings increased 23.5% from Rs 40 crore in FY19 to Rs 49 crore in FY21. It is free from meaningful contingent liabilities.
Looking at the strong financials one may subscribe the Tatva IPO for listing as well as long term.
Tatva Chintan Pharma Chem Peers Comparison:
Tatva Peers list includes big names in speciality chemical, such as Aarti Industries, Alkyl Amines Chem, Vinati Organics, Fine Organic Indus, Navin Fluorine Int.
Tatva Pharma stock would trade at a P/E of 45.9, which is lower than its peer’s median level of 73.3. Whereas, stock would trade at a P/B of 6.1, which is also lower than its peer’s median level of 12.7.
The company will be looking to increase it’s market cap significantly in the forthcoming years.
The current capacity utilisation is around 68%, and the company is further expanding capacity using the IPO proceeds. These factors should enable the company to grow without needing external funding in the near future.
Tatva Chintan Pharma IPO Details:
Tatva Chem will sell shares at Rs 1073-1083 per share in its 5 day initial public offering starting on July 16 to July 20, 2021, a bidder will have to apply in lots and one lot will comprise 13 shares of the company.
The shares of Tatva Pharma IPO will be allotted on 26 July 2021, The tentative date of Tatva IPO listing is around July 29, 2021. Credit of shares into the Demat Account for bidders of Tatva IPO will take place on 28th July 2021.
Tatva Objects of the Offer:
Tatva Chintan is raising Rs 500 crore, out of which Rs 225 crore will be used for capacity expansion while the rest is an offer for sale. Led by three first-generation entrepreneurs, the company intends to launch new products and further enhance its R&D expertise.
Shareholding Pattern (%) of Tatva Ltd:
Promoter – 100%
Public – 0%
Total – 100.0%
Promoter – 79.2%
Public – 20.8%
Total – 100.0%
The Tatva IPO will have Half of the issue has been reserved for qualified institutional buyers (QIBs), 35% for retail investors and the remaining 15% for non-institutional investors.
Frequently Asked Question (FAQ):
1.What Is The Symbol For Tatva Chintan Pharma Chem Limited ?
Ans: The Symbol is TATVA
2.When Tatva Chintan Pharma IPO Coming?
Ans: The Issue Period for Tatva Chintan IPO Pharma IPO is 16-July-2021 to 20-July-2021.
3. Post Modification Period For Tatva Chintan IPO?
Ans: The Post issue Modification Period for IPO is 22-July-2021 (10.00 A.M. to 11.00 A.M.).
4. What Is The Cut-off Time Period For UPI Mandate For Tatva Chintan Pharma IPO?
Ans: The Cut-off time for UPI Mandate Confirmation is 22-July-2021 (upto 12:00 PM).
5. What Is The Issue Type For Tatva Chintan Pharma IPO?
Ans: The Issue Type is 100% Book Building.
6.What Is The Price Band For Tatva Chintan Pharma IPO?
Ans: The Price (Band) Range for Tatva IPO is Rs.1073 to Rs.1083 per equity share.
7. What Is The Lot Size For Tatva Chintan Pharma IPO?
Ans: The Bid Lot i.e. Minimum Order Quantity (lot size) for Tatva Chintan Pharma IPO is of 13 Equity Shares and in multiples thereof 13 Equity Shares.
8. Who Are The Book Running Lead Managers For Tatva Chintan Pharma IPO?
Ans: The Book Running Lead Managers are, ICICI Securities Limited, JM Financial Limited
9. What Is The Face Value For Tatva Chintan IPO?
Ans: The Face Value is of Rs.10 whereas The Tick Size is of Rs.1
10. What Is The IPO Market Timings For Tatva Chintan Pharma IPO?
Ans: The IPO Market Timings is 10.00 a.m. to 5.00 p.m.
Apart from above points:
The Maximum Subscription Amount for Retail Investor is Rs. 2,00,000
The Maximum Bid Quantity for QIB Investors is 32,61,882 equity shares in multiple of 13 Equity Shares (Calculated at lower end of the Price Band)
The Maximum Bid Quantity for NIB Investors is 23,29,912 equity shares in multiple of 13 Equity Shares (Calculated at lower end of the Price Band)
The Name of the Registrar is Link Intime India Private Limited
The Contact person name number and Email id is Mr. Shanti Gopalkrishnan, 022 49186200, [email protected]
The Address of the Registrar is C 101, 247 Park, L.B.S. Marg Vikhroli (West), Mumbai 400 083 Maharashtra, India
Where To Check Tatva Chintan Pharma IPO Application And Allotment Status?
As an investor or trader generally we are curious and anxious to know the results of the application as soon as possible. To ease the anxiety, both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) have come up with dedicated pages and links which investors can use.
The NSE has an IPO bid verification module. It can be used to verify the IPO application details uploaded on the exchange bidding system by your member/bank. The data of the bid details uploaded by the member/bank would be available on T+1 day (where T would be date receipt of bid on NSE platform).
In addition, the data would be available until six days after the issue closure date. This gives the investor enough time to verify the data and instruct the member/bank to make any changes, if required.
Exchange will also provide allotment information as provided by the registrar to the issue.
An investor can avail this facility by registering using his/her PAN details. After registration, the investor will receive an email notification from NSE on the registered email address. That email will provide the login details.
The following link can be used for the same:
The BSE has also come up with a similar platform.
This unique facility allows investors to verify the status of their application submitted to a Trading Member or a SCSB (Self-Certified Schedule Banks).
The investor can check his application status/information on the website until one week after issue close.
The following link can be used by investors:
Important Things To Keep In Mind Before Applying For IPO’s:
- Try to fill for the same IPO online from different DP ID i.e. if in your family have more than 1 account you can possibly get the allocation done in case of over subscription.
- You should have a good knowledge of the sector and the company you are planning to invest.
- Analysis of the company’s balance sheet is very crucial. A clear understanding of the company’s future projects and vision is very necessary to know whether it will have a sustainable future.
- Investment decision has to be taken carefully and not in a hurry.
- Read as much as you can about the company, its objectives for launching the IPO, its past history in business and its futures prospectus.
- Don’t go for hype in the news, your analysis should be based on facts rather than gossips and rumors.
- Many IPOs are oversubscribed. What this means is that the demand for shares is much higher than the shares available for sale. In such a situation, it is no surprise that many investors fail to get any shares allotted to them. This is why it is advisable to apply for IPO shares on the last day of bidding. This way, one can have a good estimate on how large the subscription will be. Also, in that case, one should bid for just one lot and not unnecessarily lock up their capital.
Globally, a need for conducting chemical processes in environmentally less harmful ways has given impetus to green chemistries. This will lead to a rise in the global PTC market to $132.8Bn in 2024 from $103.1Bn in 2019.
The introduction of BS VI vehicles in India and China has led to a sharp increase in demand for zeolites (and hence SDA) which helps in reducing emission levels.
Additionally, though a niche for the company right now, the electrolyte salt division is expected to experience good growth on the back of demand for electric vehicles and battery storage devices.
Let us checkout some of the strengths and risk factors for Tatva Chintan Pharma Chem Limited (TCPCL):
Some of the qualitative factors and strengths of Tatva Chintan:
- The company is the largest and only commercial manufacturer of SDAs for zeolites in India.
- It has a DSIR approved R&D facility in Vadodara and, in the past 10 years has commercialised 82 products.
- In the past three years, it has invested around 1.7-1.9 per cent of its revenue towards R&D, and its products are highly technical.
- The company’s products find application in various end-use industries such as automotive, petroleum, pharmaceutical, agrochemicals, paints and coatings, dyes and pigments, and others protecting it from cyclicity of the chemical sector.
Some of the Risk Factor for Tatva Chintan:
- Higher RMAT cost and inability to pass on to impact performance
- Loss of customer to impede performance
- Lower end user demand to impact performance
Therefore, it is always advisable to go through Tatva IPO – RHP to know in detail about the company.
The only thing which should be bothering you is the research you did before applying for the IPO. Investing in IPO is risky as well as profitable.
Having said that you also need to keep in mind important things mentioned above before applying to IPO’s as the risk is always involved.
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All investments are subject to risks, which should be considered prior to making any investments. The above details are compiled from information available on public platforms. These are not buy or sell recommendations.