Shiv Texchem Limited imports and distributes hydrocarbon-based secondary and tertiary chemicals. They import and distribute hydrocarbon-based chemicals like Acetyls, Alcohol, Aromatics, Nitriles, Monomers, Glycols Phenolic, Ketones, and Isocyanates product family. Shiv Texchem IPO plans to raise Rs.101.35 crores. The issue is entirely a fresh issue of shares

About Shiv Texchem Limited

• Company is primarily engaged in the business of importing and distributing hydrocarbon-based chemicals that are crucial raw materials for a wide range of industries including paints, coatings, printing inks, agro-chemicals, polymers, pharmaceuticals, and industrial chemicals.
• It has been serving as preferred sourcing partners, aggregates customer orders and engage with global producers and suppliers to negotiate pricing, specifications, quantities, and delivery schedules.
• They bridge the gap between global suppliers and local industries, ensuring a steady and reliable supply of crucial chemicals
• Vikas Pavankumar, Hemanshu S. Chokhani, Pavankumar Sanwaria Realty Private Limited, and Hemanshu Syntex Private Limited are the promoters.

Financials: Shiv Texchem IPO

Shiv Texchem IPO: Anchors

Shiv Texchem IPO: Salient Points

• India has been one of the largest consumers of chemicals & petrochemical products in Asia Pacific region for the bulk of the last 10 – 15 years.
• The rapid growth in India’s manufacturing infrastructure during this time period have created strong demand for a wide range of chemical & petrochemical input materials and intermediates.
• They are primarily in the business of importing and distribution of hydrocarbon-based chemicals of the product family viz. Acetyls, Alcohol, Aromatics, Nitriles, Monomers, Glycols Phenolic, Ketones, and Isocyanates, which are critical raw materials and inputs for manufacturing of paints and coatings, printing inks, agro-chemical products, specialty polymers, pharmaceuticals products and specialty industrial chemicals.
• Over the past three Fiscals, they have expanded product portfolio from offering 21 products in Fiscal 2022 to 39 products by Fiscal 2024 and 43 products as on June 30, 2024. As a result their customer base has also grown from above 400 customers by Fiscal 2022 to over 650 customers by Fiscal 2024 and above 700 customers by June 30, 2024 which has helped them to penetrate a wide market t
• Their network of suppliers has expanded from above 30 in Fiscal 22 to above 60 during Fiscal 2024 and above 65 during quarter ended June 30, 2024. They continuously endeavour to expand the souring and supply of products from diverse suppliers and from multiple countries to ensure availability even in adverse times or disruptions due to unforeseen events.
• They have reduced our dependency on selected products by expanding our products portfolio.
• It is a high volume and low margin business model which require them to invest substantial sum in working capital requirements of the Company.
• Net proceeds use :

• PE 2024: 12.8x , PE 2025 (annualized) 10x
• Peers: None
• Their diversification of revenue across multiple industries and customers allows them to prevent any possible customer concentration.
• In addition, diversified product portfolio allows them to counter seasonal trends and address different business cycles across industries where their products are used.
• With a good track record and diversified product portfolio, they have been able to retain r existing customers and have also been able to attract new customers.
• In addition to broad range of hydrocarbon chemicals, they also source other niche hydrocarbon-based chemicals tailored to our customers’ specific requirements. For example, they have sourced special compounds such as Methyl Iso Butyl Ketone and food grade Hexane for specific requirement of certain of our customers. Leveraging their global network of chemical manufacturers and distributors, they can fulfil customized sourcing needs of customers.
• Their process involves comprehensive price comparisons and evaluations to ensure optimal, reliability and cost-effectiveness when placing orders with selected suppliers, fulfilling their commitments to customers efficiently and effectively.
• They bridge the gap between global suppliers and local industries, ensuring a steady and reliable supply of crucial chemicals for their clients.
• They have strategically sourced a wide variety of products from global producers and suppliers and have successfully delivered to a large customer base comprising of more than 600 customers across pharmaceuticals, resins & abrasives, paints & dyes, personal care/cosmetics, etc. Its customers include some of the well established players such as Gujarat Fluorochemicals Limited, Reliance Industries Limited Jesons Industries Limited, B.k. Sales Corporation , Vinati Organics Limited etc.. Their sourcing efforts have spanned multiple countries including China, Taiwan, South Korea, Kuwait, Qatar, USA, Netherlands, Belgium and Italy amongst others
• I intend to apply in Shiv Texchem IPO evn though present SME market is in a state of flux and adverse outcomes cannot be ruled out. Being a trading company only, the margins are slim but some slight improvement is visible in margins over the years. Revenues and Profits have grown at a good pace over the years. Listing gains in SMEs are under pressure and can also get affected in short run by developments in Middle East Asia. They have created a unique space in supply of sourced niche and critical hydrocarbon-based chemicals needed by many industries.
• GMP as reported on social media is Rs. 40 (24%)
• Lead manager has quite decent record and enjoys good standing.
• SME IPOs are quite volatile and new retail investors need to exercise considerable caution in my view.
• This post is exploratory and educational purposes only. Please do your own diligence before investing in SME IPOs like this.
• 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.