Introduction
Gujarat Polysol Chemicals Limited (GPCL) filed a Draft Red Herring Prospectus (DRHP) for launching its IPO with the Securities and Exchange Board of India (SEBI) in March 2022. The Vapi, Gujarat-based company, has three manufacturing facilities in India at Vapi (Gujarat), Sarigam (Gujarat), and the Union Territory of Dadra and Nagar Haveli and Daman and Diu.
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About the Company
As the name suggests, Gujarat Polysol Chemicals is a chemical manufacturing company that mainly deals with clients in the Infra-tech (construction), agro, dyes, textile, and leather industries. It was incorporated in 1989 and has become one of the leading companies in its segment to the current date.
It manufactures around 130 chemicals with an aggregate manufacturing capacity of 1,30,400 metric tonnes.
Below are the key strengths and weaknesses of the company:
Strengths
- It has a solid and diversified customer base. As on February 2022, the company catered to 829 clients in India and abroad.
- GPCL claims to be among the leading suppliers of dispersing agents in infra-tech chemicals, pesticide formulations, dyes, pigments, and textile and leather chemicals. The company manufactures a large bouquet of around 130 products.
- The company has a strong focus on research and development. It has spent more than Rs 3.3 crore on R&D and has developed 17 new products since 2018.
- The company has generated profits consistently over the years. The company has maintained profit growth despite declining revenue during the last three financial years.
Weaknesses
- The top five clients of the company contribute significantly to its revenues. Any termination of the contract may impact the company's profit margin adversely.
- The manufacturing process of chemicals involves the use of hazardous substances. Hence, the company is subjected to strict laws related to the environment, health, and safety of its employees.
- There are ongoing legal proceedings against the company's promoters, directors, and partners.
Financial Snapshot
The company has doubled its profit to Rs 40 crore in the Financial Year 2020-21 from Rs 20 crore in 2019-20. However, the company's revenue has decreased to Rs 380 crore from Rs 440 crore in the same period. The company's total net worth as of September 2021 stood at Rs 140 crore. The table below illustrates the company's financial snapshot as per the DRHP filed with the SEBI:
| Particulars |
6-month period ending Sept. 2021 |
FY 2020-21 |
FY 2019-20 |
FY 2018-19 |
| (in Crore) |
(in Crore) |
(in Crore) |
(in Crore) |
| Net Worth |
Rs 140 |
Rs 124 |
Rs 76 |
Rs 56 |
| Revenue |
Rs 182 |
Rs 380 |
Rs 440 |
Rs 439 |
| Profit after tax |
Rs 16 |
Rs 40 |
Rs 20 |
Rs 13 |
| Borrowings |
Rs 93 |
Rs 77 |
Rs 69 |
Rs 78 |
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IPO Details
As per the DRHP filed by the company, it plans to raise Rs 414 crore through its IPO, which comprises a fresh issue of up to Rs 87 crore and an offer for sale of up to Rs 327 crore. The company's equity shares will have a face value of Rs 10 per share. The company got SEBI's approval to launch its IPO in July 2022 but is yet to announce the issue date, price, band, lot size, etc.
INGA Ventures Private Limited will be the book-running lead manager for the IPO, and Link Intime Private Limited will serve as the registrar. The company has reserved 75% of the offer for Qualified Institutional Buyers (QIBs), 10% for retail investors, and 15% for Non-Institutional Buyers (NIBs).
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