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MCON Rasayan IPO envisages to raise ₹6.84 Cr at a fixed price of ₹ 40 per share with a market lot of 3000 shares. MCON Rasayan is in the business of manufacturing, marketing and selling of modern building materials and construction chemicals. It will list on the listed on the Emerge Platform of National Stock Exchange of India Limited, NSE SME platform.

• MCON Rasayan is in the business of manufacturing, marketing and selling of modern building materials and construction chemicals with a suite of more than 80 products which includes a range of construction materials and construction chemicals in both powder and liquid forms.
• Its powder products such as ready mix plaster, tile adhesives, block adhesives, wall putty, micro concrete & polymer mortar, engineering non shrink grouts and floor hardeners are widely used in the building construction segment.
• Its liquid portfolio having products such as poly-urethane (PU) based liquid membrane, bonding agents, paints, anti-corrosive coatings, concrete admixtures and curing compounds. Our products are marketed and sold under the “MCON” brand.
• has manufacturing plants, one each in Valsad and Navsari, Gujarat. Our plant at GIDC Sarigam, Valsad, Gujarat mainly manufactures admixtures, wall putty, tile adhesives, paints, concrete repair systems and waterproofing systems and has an installed capacity of 2,500 MTPA. Our other plant at Chikli, Navsari, Gujarat mainly manufactures readymix mortars, block adhesives and tile adhesives and has an installed capacity of 12,500 MTPA.
• The third plant is a greenfield project under-construction at Ambethi, Valsad and is expected to be operational by the end of FY 2023. Its total installed manufacturing capacity will be 36,000 MTPA for powder products and 6,000 MTPA for liquid products by the end of FY 2023.
• Have obtained certifications viz. ISO 9001:20152 (QMS), ISO 14001:2015 (EMS) and ISO 45001:2018 (OHSMS) for manufacture and supply of construction & water proofing chemicals and paints in respect of Unit I. Also obtained IS 15477:2019 for Adhesive for use with ceramic, mosaic and stone tiles and IS 2645:2003 for Integral waterproofing compounds for cement, mortar and concrete.Has obtained the Certificate of Compliance for its products, MCON Mortar, MCON NSA Grey Gold, MCON NSA Grey No Limit, MCON NSA White, MCON NSA White Gold, MCON NSA White No Limit and MCON LW, identified by the symbol “CE”.
• It supplies products to more than 100 distributors and dealers which in turn supply them to more than 1300 retailers based in the States of Maharashtra, Gujarat and Rajasthan who serve various developers, contractors and architects in these western regional markets.

SMCON Rasayan IPO: Financials

Salient Points

• MCON Rasayan top 5 customers represented 55.45%, 58.48%, 76.40% and 83.97%, respectively, of revenue from operation for six months period ended September 30, 2022, and for Fiscals 2022, 2021 and 2020, respectively.
• Brands under which it sell products include “MCON Magic Coat WP”, MCON MORTAR/NSA Grey, MCON Block Fix /Block Mortar, MCON Wall Putty
• in Fiscals 2022, 2021 and 2020, it launched eight new and innovative products and in the current fiscal itself launched the following products under MCON brand:
  • MCON CI 300: Corrosion Inhibiting Concrete Admixture – Bipolar corrosion inhibiting admixture in liquid form for reinforced concrete and mortar.
  • MCON 2K EPOXY PRIMER: Epoxy Primer – This is a two component, epoxy-based primer is suitable for priming concrete / metal surfaces, including walls, prior to the application of any epoxy flooring, epoxy coating and epoxy repair mortar.
• Expansion planned by setting up a greenfield manufacturing plant at Ambethi, Valsad, Gujarat with a fresh capacity of 18,000 MTPA. Post its expansion plans for the new unit at Ambethi, Valsad, Gujarat, it will cease operations at the Chikli, Navsari manufacturing unit.
• Empaneled with MCGM, MHADA and CIDCO and supplying its products for use in various projects of these government bodies.
• The manufacturing plants are situated at Valsad being the border of Maharashtra and Gujarat which is strategic location with respect to serving the western regional markets of the country.
• There is conflict of interest as common business objects shared by Company and a Promoter group entity M/s. R.K Traders who is in the business of trading in modern building materials and construction chemicals.
• There is an an abnormal jump in profits in H1Fy23.
• Social media reports indicate a GMP of about Rs. 30-32 on the issue price.
• Has availed loans from HDFC Bank, ICICI Bank, Yes Bharat Bank etc.
• PE ratio is 57x (fy22 earnings)  and 15x (fy23 annualized).
• P/BV is 1.95x based on its post-IPO NAV of Rs. 20.48 per share.
• I have a neutral view on MCON Rasayan IPO, I am likely to apply in MCON Rasayan IPO on Day 3 considering its launch of new products, segments in which it operates.
• SME IPO are more volatile and I generally exit on the listing day, many times in pre open session.
• The lead GYR has a reasonable record with most of the SME IPOs lead managed by them having listed with gains.
• Please do your own diligence as SME IPOs are more volatile and risky than mainboard IPOs and need more funds.

• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in 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. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.