Ushanti Colour Chem Ltd. IPO
IPO Timeline
Category-wise Subscription
| Category | Sub (x) | Offered | Bid For | Amt (Cr)* |
|---|---|---|---|---|
| NII (HNI) | — | 914,000 (47%) | — | ₹548 Cr |
| Retail | — | 914,000 (47%) | — | ₹548 Cr |
| Market Maker | — | 98,000 (5%) | — | ₹6 Cr |
| Σ Total | — | 1,926,000 (100%) | — | ₹11,556 Cr |
Only available investor categories are shown. Amount is auto-calculated when shares offered and issue price are available.
Issue Details
Minimum Investment (Lot-wise)
| Category | Lots | Shares | Amount (₹) |
|---|---|---|---|
| Retail (Min) | 1 | 2,000 | ₹120,000 |
| Retail (Max) | 13 | 26,000 | ₹1,560,000 |
| S-HNI (Min) | 14 | 28,000 | ₹1,680,000 |
| B-HNI (Min) | 67 | 134,000 | ₹8,040,000 |
Financial Statements Amount in Lakhs
| Metric | 31-Dec-17 | 31-Mar-17 | 31-Mar-16 |
|---|---|---|---|
| Revenue | 2,743 | 2,962 | 2,511 |
| Profit After Tax | 245 | 138 | 38 |
| Total Assets | 2,702 | 2,274 | 2,239 |
Valuation & Key Ratios
Grey Market Premium (GMP)
GMP is an unofficial grey market indicator and does not guarantee actual listing price. Invest at your own risk.
Objects of the Issue
- 1 To finance setting up of Dyestuff Pigment and Intermediates manufacturing facility at GIDC Saykha Industrial Estate, Bharuch – 3.00
- 2 Repayment/pre-payment of certain secured borrowings availed by the Company – 5.80
- 3 General corporate purposes – 2.26
Company Overview
Incorporated in 1993, Gujarat based Ushanti Colour Chem Limited is a company engaged in the business of manufacturing and trading of Dyestuffs.
The Company manufactures Reactive and Direct Dyestuffs also known as Synthetic Organic Dyes. It also manufactures Copper Phthalocyanine, Blue Crude which is used for manufacturing of Dyestuffs. The pigment and dyestuffs cater to the raw material requirement of various industries including wool, ink, wood, leather, nylon, paper, textile, garment, cotton, plastic and paint etc.
The company has 3 manufacturing facilities, spread over 2,739 sq. meters, located at Vatva GIDC in Gujarat. It also has its own Ice generation machinery. It recovers Ammonium Carbonate which is reused in the plant as well as sold to the Soda Ash Industry reducing wastage providing the company with incremental revenue.
The Monthly Production capacity of the company increased from 5 MT in 1990 to 300 MT now. With the new capacity addition, production will be 1350MT.
With land of 3000sq. mt, at Vatwa & 75000sq. mt land at Saykha, the company's enterprise value is around Rs 45-50 crore.
Ushanti generates around 41% of its revenue from the Domestic market while the rest 59% is generated from its export operations.
Ushanti offers its products through traders. The manufactured dyes are sold as per the orders received by parties either directly from manufacturers or traders.
New Project Features
Expansion Phase I & II : Turquoise Blue Dyestu, Pigments & Intermediates
1. Highly Profitable.
2. For Backward Integration Project, no pressure to sell & not much working capital required.
3. China has almost stopped production of Intermediates and Dyestuffs
4. With production of Intermediates with Dyestus/Pigments, Ushanti will be extremely competitive in "Turquoises"
Phase III : (other products)
1. Phase I & II projects' production will stabilize by 2020-21. Phase III of the project, for other products, will be started thereafter.
2. Funding for Phase III will be through an FPO of Rs 100 crores approx. after migration to the main board.
Other Features
1. Vertical expansion: All plants will have Dyestu /Pigment units with their intermediates to ensure cost competitiveness.
2. Scale: Huge economies of scale with plant size 5-10 times the size of its Vatwa Plants
Strengths of the company-
1. Over 50 years of experience, manufacturing since 1979
2. Consistent profits with PAT of Rs. 2.38 Cr in 2017-18
3. Operates in a niche market for Turquoise Blue. There are very few plants worldwide producing Turquoise Blue. Even fewer plants with their own intermediates. The company's expansion plan is focussed on Turquoise Blue Dyestu/Pigments with Backward Integration Plants.
4. Good cost reduction plans on Energy and Pollution treatment. Only CNG is allowed in Vatwa while all fuels allowed in Saykha would result in a 50% reduction in energy costs. The company plans to leverage its huge land available resources and enable conversion of waste to reusable products thus reducing costs on pollution treatment.
5. Part of Sunrise Industry. The shifting of production of dyestuff/pigment from China to India has had a huge bearing on turnover and profits for the industry.