Mumbai, September 18: Chemcon Specialty Chemicals Ltd here today highlighted its initial public offering (IPO) of equity shares priced at between Rs 338 and Rs 340 each, and aggregating Rs 318 crores. The IPO will open on 21 September, 2020 and close on September 23.
Addressing mediapersons via Webinar, Kamalkumar Rajendra Aggarwal, Chairman & Managing Director, Chemcon Specialty Chemicals Ltd said Chemcon is a leading global and local manufacturer and supplier of pharmaceutical intermediates, silanes and oilfield chemicals, besides specialised chemicals such as HMDS and CMIC that are predominantly used in the pharmaceuticals, and inorganic bromides like Calcium Bromide, Zinc Bromide and Sodium Bromide, which are predominantly used as completion fluids in the oilfields industry.
The Company generated Rs 262.05 crore revenue from Operations with EBITDA of Rs 70.26 crore and Profit after Tax Rs 48.85 crore in FY 2020. It has grown at a 29% CAGR in sales, 25% in EBITA and 36% in PAT between FY18 and FY20. As on March 31, 2020 the total borrowings of the Company was Rs 44.51 cr, while the debt equity ratio was 0.31.
The Company intends to utilize the Net Proceeds from the Fresh Issue towards capital expenditure in expansion of the Manufacturing Facility, to meet working capital requirements and towards general corporate purposes.
Describing the company’s journey through the Pharma (2/3rd revenue) and oilfields (1/3rd revenue) sectors from ‘recovery of chemicals’ then to becoming the world’s third largest bromide manufacturer today, he said Chemcon exports its products to global markets covering US, Germany, Italy, South Korea, People’s Republic of China, Japan, United Arab Emirates, Serbia, Russia, Spain, Thailand and Malaysia.
FY05 witnessed the ‘first’ export of HMDS (used in semiconductor electronics industry and vinyl silicone rubber, he said while pointing out that Chemcon is the largest manufacturer in India (and 2nd largest worldwide) of CMIC which is witnessing a global demand of 4,000 tonnes annually. “Our oilfield verticals manufacture includes bromides in which we are India’s largest maker of ‘zinc’ bromides, he said while noting that this bromide is used in oil drilling areas and is now witnessing a CAGR of 25%.
Replying to questions, Aggarwal, said that in the wake of COVID-19 affecting the Indo-China trade – which has earlier witnessed Chemcon importing 75%-80% of raw materials from China – the company had now stopped Chinese imports and is now focusing on outsourcing its raw material imports from Thailand, Germany, USA, Thailand and other Far East countries.
While the company’s PAT and EBITDA had increased with exports up by CAGR of 17% (between FY18 and FY 20), increase in production volumes had led to prices dropping and loss of revenue, he said while describing income as 65% (Pharma verticals) and 35% (Oilfield verticals) through quality and pricing at global standards.
However, these prices tend to vary due to costs of raw materials fluctuating in the demand/supply situation, he said while noting that the company had seven manufacturing plants , besides the addition and commissioning of two new plants within the next eight months expected to witness the company’s manufacturing output grow by 60%.
“Our aim is to expand sale of products to other industries where our products have applications and, besides obtaining approval from Government authorities to manufacture 44 products, we have also acquired 22,000 square metres of land to our existing 29,000 square metres land bank for future expansion,” he added.
Where dealing with flammable chemicals was concerned, the company maintained a decade-long, mishap-free record except for an minor accident occurring in a warehouse in January 2018, he said.
Navdeep Naresh Goyal, Deputy Managing Director, Chemcon Specialty Chemicals Ltd , said that exports brought in 40% of the company’s revenue in FY20.