This post on Tatva Chintan Pharma IPO attempts to bring out consolidated brokerage views , subscription information, Grey Market Premium (GMP) and anchor investor information where applicable. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Tatva Chintan Pharma IPO or not.
Related Posts : Tatva Chintan Pharma IPO Review
Tatva Chintan Pharma IPO: Grey Market Premium etc.
- 16-07-21 GMP Rs. 700
Subscription: Tatva Chintan Pharma IPO ( x times)
| Day / X times | QIB | NII | Retail | Total |
| Day 3 | 186.96 | 516.99 | 35.68 | 182.04 |
| Day 2 | 1.98 | 12.32 | 23.96 | 15.19 |
| Day 1 | 0.51 | 1.15 | 8.32 | 4.55 |
| Total Retail Applications | ~ 3244400 | |||
| Appl wise Retail | 26.10 x |
Consolidated Brokerage Views on Tatva Chintan Pharma IPO
Angel Broking :”Subscribe:Tatva Chintan’s is the largest player in India for PTCs and the only manufacturer in India of SDAs for zeolites which have importance due to preference for green technologies. The company has shown good revenue and earnings growth and has healthy balance sheet with solid return ratios. It is raising funds for Capex and R&D requirements as they believe that there is strong growth opportunity available. Given the client additions, wide portfolio, its capabilities, and favorable outlook for the industry, we believe that Tatva Chintan can maintain healthy growth rates which justifies the ~46x FY21 EPS commanded by the company. Hence, we recommend “SUBSCRIBE” to the issue.”
Capital Market : ” Score 50/100 ; At the higher price band of Rs 1083, the offer is made at around 45.9 times its EPS of R 23.6 for the period ended March 31, 2021, on a post-issue equity share capital of R 22.17 crore of face value of Rs 10 each. Listed industry peers of the company are Aarti Industries, Navin Fluorine International, Alkyl Amines Chemicals, Vinati Organics and Fine Organics. In comparison Aarti Industries trades at 59.5 times its FY2021 EPS of Rs 14.4 at the current market price of R 859, Navin Fluorine International trades at 78.4 times its FY2021 EPS of Rs 49.63 at the current market price of R 3891, Alkyl Amines Chemicals trades at 101 times its FY2021 EPS of Rs37.1 at the current market price of Rs 3776, Vinati Organics trades at 74.4 times its FY2021 EPS of R s26.2 at the current market price of Rs 1950 and Fine Organics trades at 76.8 times its FY2021 EPS of Rs 39.2 at the current market price of Rs 3014.”
Choice Broking: “Subscribe: Considering its niche product profile with diversified applications and dominant domestic production share,the company would continue to post robust operating and financial performance in the future. Also with the proposed expansion of its capacity, Tatva Chintan will be well-positioned to capitalise on the growth opportunities in the specialty chemicals space.”
KR Choksey: “The company’s growth prospects are bright owing to its leadership status in the various product categories of specialty chemicals and significant presence in export markets. Also, given that it operates in segments which could see rise in environmentally sustainable products, the growth potential is further higher. We recommend a ‘subscribe’ rating for long-term gains from the IPO”
Motilal Oswal: “We like Tatva Chintan Pharma Chem due its leadership position, wide product portfolio, strong client relationship and high entry barriers. The company is expected to witness strong growth for next 2-3 years given its expansion plans. It is well placed to tap opportunity in the fast-growing specialty chemical space with increasing focus on green chemistry by leveraging its strong R&D capabilities. The issue is valued at 45.9x FY21 P/E on post issue basis, which appears reasonable compared to peers (avg. P/E of 59x), as it enjoys higher earnings growth (62% CAGR vs. avg. 38% CAGR for peers over FY18-21). Hence, we recommend Subscribe.”
Reliance Securities: “The IPO is valued at 41.6x of FY21 earnings, which looks attractive considering peers’ valuations and unique presence in specialty chemical business segment. Further, the company’s return ratio is superior compared to peers, with RoE sanding at ~32% as of FY21. Further, current capacity utilization at 55-69% for both plants offers scope for sustained growth in the medium-term. We believe the company has a robust earnings growth potential in the long-run led by strong market share, capacity expansion and long-standing relationship with the key customers. Hence, we recommend SUBSCRIBE to the IPO”
SMC: “Score 2.5/5 ; The company is one of the leading global producers of an entire range of PTCs in India and one of the key producers across the globe. SDA and PTC products have various applications in green chemistry, which is pertinent considering the growing focus on green and sustainable technologies. Factors such as robust earnings growth outlook with strong market share, consistent focus on R&D, greater control over cost and strong long-standing relationships with key customers augurs well for the company. On the valuation front, the issue is reasonably priced.”
SP Tulsiyan Website: “Ongoing capex, attractive tax breaks and healthy margins, make the fundamentals sound. Valuation multiple on historic basis is in-line, but attractive over the medium term. Hence one may apply in the IPO with a long term view..”
Ventura Securities: “At the offer for sale price of INR 1,083, the stock is valued at 31.3X FY24 earnings. The high valuations are justified given the * high growth potential * dominant producer status * exposure to green energy * strong balance sheet. Upcoming expansion plan will increase the company’s aggregate capacity by 200 kilo liters (71.4%), which is a significant expansion and could impact profitability and return ratios in the next 2-3 years. We recommend a SUBSCRIBE for listing gains.”
Standard disclaimer: Standard disclaimer: I am not a SEBI registered analyst /investment adviser and above information is collated from various online sources and is for educational purpose only. Please visit individual brokerage sites to read the actual reports. Please do not make your investment decisions based on this info as it is not complete and exhaustive. Please do your own due diligence as stock market investments have high degree of inherent risk.