Tatva Chintan Pharma Chem Limited made a stellar debut on the bourses on Thursday, opening for trade at nearly 100 percent premium over its listing price. The stock got listed at Rs 2,111.85 on the National Stock Exchange (NSE), a 95 per cent premium to its issue price. On the Bombay Stock Exchange (BSE), the
Tatva Chintan Pharma Chem stock opened at Rs 2,111.80, up over 95 per cent.
Considering the company is well positioned in the market to capitalise on opportunities in agrochemical sector, increase in demand, R&D capabilities, and adoption of China plus one strategy by global companies, many brokerages had recommended ‘subscribe’ rating.
Tatva Chintan Pharma Chem IPO, which sold between July 16 and 20, received a strong response from the investors. The issue received bids of over 58.83 crore shares against the total issue size of over 32.61 lakh shares, according to data available with the National Stock Exchange (NSE). The quota reserved for qualified institutional buyers (QIB) was subscribed 185.23 times. The shares allocated for non institutional investors’ quota was booked 512.22 times while retail portion was subscribed 35.35 times.
Vadodara based Tatva Chintan Pharma Chem Limited is a niche specialty chemical manufacturing company. It is the largest and only commercial manufacturer of structure directing agents (SDAs) for zeolites in India. In addition, the company is one of the leading global producers of an entire range of phase transfer catalyst (PTCs) in India and one of the key producers across the globe. It has a strong product portfolio with 47 products under SDA portfolio, 48 products under PTC Portfolio, six products under electrolyte salts and 53 products under PASC portfolio, as of FY21. Apart from customers in India, the company also exports products to over 25 countries, including the United States, China, Germany, Japan, South Africa, and the United Kingdom accounting to 70% of revenues, said Hemang Kapasi, head of equities, Sanctum Wealth Management.
“Since inception, the company has consistently sought to diversify portfolio of products, which could cater to customers across segments, sectors and geographies. In accordance with this, while it seeks to continue to strengthen existing product portfolio, it intends to further diversify into products with prospects for increased growth and profitability. The company plans to continue to increase offerings in current business segments as well as diversify into new products by tapping into segments which in the view of management have attractive growth prospects. For instance, it intends to increase focus on products manufactured using continuous flow chemistry processes as well as electrolysis processes, as these will be more sustainable and are good value propositions," said ICICI Securities in a note.
“Tatva Chintan Pharma Chem 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. Well placed to capitalize on opportunities in agrochemical sector led by proposed capacity expansions, increase in demand, R&D capabilities, and adoption of China plus one strategy by global companies," Geojit said in a note.