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Accent Microcell IPO plans to raise ₹78.40 Cr crores. The issue is entirely a fresh issue of 5,600,000 shares. Accent Microcell Limited produces high-quality cellulose-based excipients mainly for the Pharmaceutical, Nutraceutical, Food, Cosmetic and other industries. Excipients are inert pharmaceutical ingredients that are used in product formulations

About Accent Microcell:

• Company was incorporated on April 10, 2012, with the primary focus on manufacturing of the high-quality cellulose-based excipients which predominantly find application in Pharmaceutical, Nutraceutical, Food, Cosmetic and other industries.
• Accent Microcell manufactures cellulose-based excipients as follows:
  • Microcrystalline Cellulose (MCC) – Spray Dryer / Spin Flash Dried
  • Microcrystalline Cellulose Spheres (MCC Spheres)
  • Silicified Microcrystalline Cellulose (SMCC)Powdered Cellulose (PC)Croscarmellose Sodium (CCS)Magnesium Stearate
  • Microcrystalline Cellulose with Carboxy Methyl Cellulose (Co-Processed)
• They majorly manufacture Microcrystalline Cellulose (“MCC”) which is an odourless, fine white powder & a purified form of cellulose, derived from refinement of highly purified wood pulp. It is widely used as texturizer, anticaking agent, binder, lubricant, a bulking agent, diluent which finds a wide range of applications in Pharmaceutical, Nutraceutical, Food, Cosmetic and other industries.
• They manufacture 22 grades of MCC, with particle sizes ranging from 20 microns to 180 microns. The major grades of MCC manufactured and marketed by Company are branded under the name “accel”. Besides “accel” is sold under the name “acrocell”, “maccel” and “Vincel”.
• They have two state-of-art manufacturing facilities located in Pirana (Unit -I) and Dahej SEZ (Unit -II). Unit I i.e. Pirana manufacture product mainly caters to the domestic market which manufacture MCC, SMCC, PC, MCC with CMC. Unit II i.e Dahej SEZ is set up as export-oriented unit (“EOU”) which is purely engaged in the manufacture of MCC, MCC sphere, SMCC, MCC with CMC which is exported to overseas customers and distributors.

Financials: Accent Microcell

Anchor: Accent Microcell IPO

Accent Microcell IPO: Salient Points

• Excipients are inert pharmaceutical ingredients that are used in product formulations. The pharmaceutical industry relies on various excipients, which serve as inert carriers or additives in medications.
• These excipients can be categorized into three groups: natural, semi-synthetic, and synthetic. Among these groups, natural excipients are frequently preferred due to their minimal impurities, ready availability, and are economically cheap as compared to their synthetic counterparts.
• Microcrystalline cellulose (MCC) is one of the most commonly used natural excipient that is obtained from wood pulp sheets and the company also deals majorly in MCC which primary relies on wood pulp sheets as the key raw material for producing MCC and its various grades.
• Microcrystalline cellulose is used as a texturizer, an anti-caking agent, a fat substitute, an emulsifier, an extender, and a bulking agent in food production. The most common form is used in vitamin supplements or tablets. It is also used in plaque assays for counting viruses, as an alternative to carboxymethylcellulose.
• Accent Microcell Limited produces high-quality cellulose-based excipients mainly for the Pharmaceutical, Nutraceutical, Food, Cosmetic and other industries.
• Company has carved a niche in producing high-quality cellulose-based excipients, that meet international quality standards.
• 75% of company’s revenue comes from exports.

• The revenue from the pharmaceutical, food, nutraceuticals was Rs.4,277.68 lakhs, Rs. 618.89 lakhs, Rs. 983.99 lakhs respectively, that accounts for 72.74 %, 10.52 % and 16.73 % respectively of their revenues.
• Details of product wise revenue contribution

• Company intends to utilize the Net Proceeds to set  up  plant  for  manufacturing  Croscarmellose  Sodium  (“CCS”),  and  Sodium  Starch Glycolate and Carboxymethylcellulose (CMC).
• It shall be adding 2,400 metric tons to current total installed capacity of 8,000 metric tons, The expansion of capacity will enable the company to deliver products specifically tailored to customer needs.
• In addition to existing customer base, it intends to cater to the clients in untapped regions.
• Accent have established a robust manufacturing infrastructure, supported by an efficient supply chain that caters to the needs of our Indian and global clientele.
• With over 10 years of continuous growth, two state of the art manufacturing facilities and consistent focus on delivering premium quality product, Company is one of the Global leading manufacturers of Microcrystalline Cellulose (MCC).
• Accent Microcell’s PAT more than doubled to Rs. 13.01 crore in FY23 from a PAT of Rs. 5.89 crore in FY22. The company reported PAT of Rs. 7.06 crore in Q1 of FY2023-24.
• Accent Microcell IPO is coming at a PE ratio of 22.6x(fy23 earnings) and 10.4x (fy24 annualized earnings).
• I intend to apply in Accent Microcell IPO subject to release of funds from other IPOs. Company has a good track record and looks on the the right trajectory. Looks good for both medium to long term and short term. Subscription is expected to be quite high.
• GMP as reported on social media has been around Rs. 125.
• Corporate Capitalventure is the Lead Manager. Past issues handled by them include Rockingdeals Circular Economy, Oriana Power Limite, Crayons Advertising Limited, Droneacharya Aerial Innovations Limited, Annapurna Swadisht Limited, Rajnandini Metal Limited, Swastik Pipe Limited, Uma Exports Limited, Phantom Digital Effects Limited, Nupur Recyclers etc.
• Prabhat Financial Services Ltd. the market maker for the issue had earlier acted as market maker for Vertexplus Technologies.
• SME IPO are much more risky than mainboard IPOs. This post is not a suggestion to apply for this IPO.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational/ exploratory purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.