Citichem India shares debuted at ₹70 on BSE SME, matching their IPO price.
Citichem India’s ₹12.60 crore IPO was offered for subscription between December 27 and December 31. Citichem India’s IPO price band was ₹70 per equity share.
After three days of bidding, Citichem India’s IPO ended with exceptional demand, receiving 414.35 times bids. The IPO got offers for 70.77 crore shares, compared to 17.08 lakh on sale. The retail investor group was booked 543.18 times, while the non-institutional investors (NII) category was subscribed to 277.88.
About the IPO
Citichem India’s IPO was a fresh issue of 18 lakh shares worth ₹12.6 crore. Following the IPO, promoter shareholding in the company will fall to 61.21 per cent from 83.25 per cent before the IPO. Retail investors can apply with a lot size of 2,000 shares and a minimum investment of ₹1.4 lakh.
The business intends to use the net proceeds from the new offering to fund several key initiatives. These include supporting capital expenditures for property acquisition, vehicle and accessory purchases, and general business objectives. Additionally, a portion of the funds will be used to cover issue-related expenses.
“The company mainly supplies third-party products in organic/inorganic chemicals, bulk drugs, food chemicals, Pharmaceuticals, etc. It marked drastic de-growth in its top lines for the reported periods, but net margin surged from FY24 onwards raising eyebrows and concern over its sustainability going forward as it is operating in a highly competitive and fragmented segment. Higher spending for the IPO process hints at structured and managed funding. A small equity base post-IPO indicates longer gestation for migration. Based on its recent super earnings, the issue appears aggressively priced. There is no harm in skipping this “High Risk/Low Return” bet,” said Dilip Davda of Chittorgarh.com, recommending an avoid rating for the issue.
Horizon Management Private Limited is the Citichem India IPO’s book-running lead manager, while Kfin Technologies Limited serves as the registrar. After Trade Broking Pvt Ltd is the market maker for the Citichem India IPO.
About the Company
Citichem India Limited was founded in 1992 as a provider of organic and inorganic chemicals, bulk pharmaceuticals, and food ingredients, principally to the pharmaceutical industry. The company prioritizes a direct supply of speciality chemicals, bulk pharmaceuticals, and intermediate goods that are tailored to industry needs.
Citichem India trades a wide range of speciality chemicals and intermediates used in a variety of industries, including aluminium, steel, textiles, paper, dairy, paints, dyes, soap making, pharmaceuticals, food, and adhesives. Its portfolio also includes food preservatives and chemicals marketed under its brand, which are transported via a well-established network, guaranteeing that large orders are delivered safely to clients.
Citichem India’s financial performance showed a 6% reduction in revenue for the fiscal year ending March 31, 2024, compared to the previous year. However, the company reported a remarkable 208 per cent year-on-year increase in profit after tax (PAT) during the same period, indicating greater profitability despite sales contraction.
