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Tatva Chintan IPO Analysis

About Tatva

  • Tatva Chintan Pharma Chem Limited is a chemical manufacturing company is one of the leading global producers of an entire range of phase transfer catalysts (PTCs) in India

  • It manufactures structure directing agents (SDAs), PTCs, pharmaceutical and agrochemical intermediates, and other specialty chemicals.

  • Tatva is the largest and only commercial manufacturer of SDAs for zeolites which is used as a catalyst in several important chemical reactions in India.

  • Globally, it is the second largest manufacturer of SDAs. It has a strong customer relationship with marquee players like Merck, Bayer AG, Asian Paints Ltd. etc .

  • The company serves customers across various industries, including the automotive, petroleum, pharmaceutical, agro chemicals, paints and coatings, dyes and pigments, personal care and flavour and fragrances industries. Apart from the company’s customers in India, it also export our products to over 25 countries, including the USA, China, Germany, Japan, South Africa, and the UK

Key Metrics

  • The ₹500 cr offer comprises a fresh issue of ₹225 cr and an offer for sale of up to ₹275 cr by promoter and promoter group. Proceeds from the issue will be used for funding expansion of its Dahej manufacturing facility and upgradation at its R&D facility in Vadodara

  • Revenue grew at 21% CAGR over FY19-21 driven by higher sales from SDAs and PASCs while PAT growth stood at 60% CAGR led by strong earnings outlook and better operating performance. It has a healthy balance sheet position with lower D/E ratio of 0.54x as of FY21

  • Moreover, ROE remains healthy at 32% in FY21. At the upper price band of Rs 1,083, TCPCL is available at a P/E of 46x (diluted) which appears to be reasonably priced

Bidding Day Performance

  • Tatva Chintan Pharma Chem Ltd’s Rs 500 cr initial public offering (IPO) continued to witness huge interest from the investors on the third day of bidding. The issue was subscribed 15.04 times on July 19, the second day IPO subscription

  • Tatva Chintan Pharma Chem IPO has received bids for 4.90 cr equity shares, on Day 2, according to the the subscription data. The issue received applications for 4,90,84,165 shares against on offer 32,61,882 shares on the second day

  • The portion set aside for retail investors has been subscribed 23.73 times. The non-institutional investors have subscribed the issue 12.21 times while Qualified institutional buyers have put in bids 1.96 times on the second day. The was subscribed 4.5 times on the first day of bidding

  • ICICI Securities, JM Financial are the book lead managers to the issue whereas Link Intime India is the registrar to the offer. The share allotment is likely to take place on 26 July while the tentative date for listing of the company's shares on NSE and BSE is July 29th

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