Kronox Lab Sciences Limited is a manufacturer of high-purity speciality fine chemicals for diverse end-user industries. Kronox Lab Sciences IPO aims to raise Rs 130.15 crores. The issue is entirely an offer for sale of 0.96 crore shares.
IPO opens
June 03, 2024
IPO Closes
June 05, 2024
IPO Size (Rs.)
₹130.15 Cr (9,570,000 shares)
Breakup
Entirely OFS
Face Value:
₹ 10 per share
IPO Price in Rs :
₹129 to ₹136 per share
Minimum Lot
110 Shares
Listing At
NSE, BSE
QIB
~75%
NII Quota
~15%
Retail Quota
~35%
Lead Manager
Pantomath Capital Advisors Pvt Ltd
Registrar
Kfin Technologies Limited
About Kronox Lab Sciences IPO:
They manufacture High Purity Speciality Fine Chemicals for diversified end user industries.
The High Purity Speciality Fine Chemicals are used mainly as (i) reacting agents and raw material in the manufacturing of Active Pharmaceutical Ingredients (APIs); (ii) excipients in pharmaceutical formulations; (iii) reagents for scientific research and laboratory testing; (iv) ingredients in nutraceuticals formulations; (v) process intermediates and fermenting agents in biotech applications; (vi) ingredients in agrochemical formulations; (vii) ingredients in personal care products; (viii) refining agents in metal refineries; and (ix) ingredients in animal health products, amongst others.
The products are manufactured in accordance with industry standards like IP, BP, EP, JP, USP, FCC, LR, AR, GR and ACS in addition to custom manufacturing specifications, which differ from the industry standards, required by our customers in select cases.
They manufacture High Purity Speciality Fine Chemicals of various grades in particle sizes ranging from 10 mesh to 100 mesh. W
Company has three Manufacturing Facilities situated at Vadodara.
Kronox Lab Sciences Ltd. Manufacturing Facilities have an aggregate installed capacity of 7,242 TPA
Financials: Kronox Lab Sciences IPO
Particulars/ Rs (in crore)
2023(09)
2022(9)
2023(12)
2022(12)
2021(12)
Revenue from Operations (₹ Cr)
67.69
74.1
95.58
82.25
62.46
EBITDA (₹ Cr)
20.46
17.88
21.99
19.7
14.8
EBITDA Margin (%)
30.23
24.13
23.01
23.95
23.7
Profit After Tax for the Year (₹ Cr)
15.47
14.09
16.62
13.63
9.73
PAT Margin (%)
22.6
18.57
17.04
16.35
15.39
Equity Capital
37.1
39.04
37.1
0.24
0.24
Net worth (₹ Cr)
60.28
54.6
44.68
40.35
26.81
EPS (Basic & Diluted) (₹)
4.17
3.61
4.3
3.49
2.4
Post issue Share Capital
37.1
FV
10.0
IPO price
136.0
EPS Fy23
4.5
PE Fy23
30.4
EPS Fy24 (annualized)
5.6
PE Fy24 (annualized)
24.5
Market cap in Lacs
505
Market cap / Sales
5.28
Kronox Lab Sciences IPO: Anchors
Kronox Lab Sciences IPO: Salient Points
The issue is purely OFS. Proceeds from the Offer will go to the Promoter Selling Shareholders.
Table sets forth industries where their products have been used:
Application/ Industry
For nine months period ended December 31,2023
For nine months period ended December 31,2022
Fiscal 2023
Fiscal 2022
Fiscal 2021
Amou nt
% revenue
Amount
% revenue
Amou nt
% reven ue
Amou nt
% of reven ue
Amou nt
% of reven ue
Pharmaceuti cals
305.46
45.13
286.96
38.72
389.78
40.78
337.24
41.00
339.86
54.41
Scientific Research and Laboratory Testing
179.65
26.54
231.43
31.23
279.23
29.21
267.63
32.54
146.17
23.40
Nutraceutica ls
160.54
23.72
191.51
25.85
245.22
25.66
174.77
21.25
113.88
18.23
Others*
31.21
4.61
31.13
4.20
41.55
4.35
42.83
5.21
24.70
3.95
Total
676.86
100.00
741.03
100.00
955.78
100.00
822.47
100.00
624.60
100.00
Key parameters
Particulars/ Rs (in crore)
2023(09)
2022(9)
2023(12)
2022(12)
2021(12)
Total Borrowings
–
–
–
0.64
0.01
Debt – Equity Ratio (x)
–
–
–
0.02
-^
ROE (%)
25.66
25.81
37.19
33.77
36.29
ROCE (%)
33.15
33.5
49.86
46.27
51.78
Fixed Assets Turnover Ratio (x)
2.61
4.62
6.01
9.3
10.87
Number of customers served
353
307
351
316
283
Number of products sold
189
155
157
156
159
New product added
8
8
10
10
12
Product under development (incremental basis)
64
26
32
31
35
Their focus on product development, diversity in product offerings, meeting quality standards and customer specifications and continuous process improvement has led to repeat orders from customers over the years.
Company has more than 185 products spanning across the family of phosphate, sulphate, acetate, chloride, citrate, nitrates, nitrites, carbonate, EDTA derivatives, hydroxide, succinate, gluconate, among others are supplied to customers in India and more than 20 countries globally.
Company intends to establish a new manufacturing unit at GIDC Dahej – II Industrial Estate and has acquired a land at GIDC – Dahej II Industrial Estate. They plan to establish its fourth unit at this location with an estimated installed capacity of 18,000 TPA which is 2.5 times their existing capacity of plant. This will manufacture High Purity Speciality Fine Chemicals from the existing product portfolio as well as new products.
High entry and exit barriers exist due to long customer approval cycles and strict product standards.
Revenue has grown from Rs.62 cr in FY21 to Rs. 96 cr in FY23
Exports (mostly USA) comprise 25% of revenue.Their export revenue has shown robust growth, at a CAGR) of 37% between Fiscal 2021 and 2023.
Kronox Lab Sciences IPO is coming at a PE of 25x (FY24 annualized)
GMP as reported on social media has been Rs. 48 (35%).
Listed peers Tatva Chintan Pharma Chem trades at TTM P/E of 75.6, Tanfac Industries trades at P/E of 36.5, Neogen Chemicals trades at P/E of 110, Sigachi Industries trades at TTM P/E of 35.3 and DMCC Speciality Chemical trades at TTM P/E of 65.3
I intend to apply in Kronox Lab Sciences IPO. There are risks due to current turmoil but issue looks good based on performance and future expansion.
Please take a decision based on your risk appetite and your own assessment.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational 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.
