As the final days of 2024 approach, Citichem India Limited is gearing up for a significant milestone in its corporate journey - its debut on the BSE SME platform. The pharmaceutical and chemical supplier is rolling out an IPO valued at ₹12.60 crores, offering 18 lakh fresh shares to the market. With the subscription window set to open on December 27 and close on December 31, 2024, this IPO marks a strategic step for a company that has been steadily building its presence in the pharmaceutical supply chain landscape.
For investors eyeing opportunities in the SME sector, Citichem's offering comes with a straightforward structure: equity shares with a face value of ₹10 are being offered at a fixed price of ₹70 per share, packaged in lots of 2,000 shares each. Retail investors can step in with a minimum investment of ₹140,000 for one lot, while HNIs have a higher entry point at ₹280,000 for two lots. With share allotment notifications scheduled for January 1, 2025, and the BSE SME listing following closely on January 3, savvy investors might want to keep this pharmaceutical supply chain player on their radar as 2024 draws to a close.
Citichem India Limited IPO is a fundraise worth ₹12.60 crores comprising purely of a fresh issue of 18 lakh equity shares with 92,000 shares reserved for the market maker Aftertrade Broking Private Limited. The IPO will be available for subscription from December 27, 2024, to December 31, 2024, providing an opportunity for investors looking to gain a stake in the company.
| Citichem India IPO Date | December 27, 2024 - December 31, 2024 |
| Fixed Price | ₹70 per share |
| Face Value | ₹10 per share |
| Lot Size | 2,000 shares |
| Issue Type | Fixed Price Issue IPO |
| Fresh Issue Size | 1,800,000 shares worth ₹12.60 crores |
| Total Issue Size | 1,800,000 shares worth ₹12.60 crores |
| Listing at | BSE SME |
| Market Maker Portion | 92,000 - Aftertrade Broking Pvt Ltd |
| Share Holding Post Issue | 6,800,000 |
| Share Holding Pre Issue | 5,000,000 |
The Citichem India Limited IPO opens for subscription on December 27, 2024, and closes on December 31, 2024, with allotment scheduled for January 1, 2025.
| IPO Open Date | December 27, 2024 (Friday) |
| IPO Close Date | December 31, 2024 (Tuesday) |
| Basis of Allotment | January 1, 2025 (Wednesday) |
| Initiation of Refunds | January 2, 2025 (Thursday) |
| Credit of Shares to Demat Account | January 2, 2025 (Thursday) |
| Listing Date on NSE SME | January 3, 2025 (Friday) |
| Cut-off Time for UPI Mandate Confirmation | 5 PM on December 31, 2024 (Tuesday) |
Citichem India Limited, established in 1992, has positioned itself as a key player in the chemical distribution sector, specializing in organic and inorganic chemicals, bulk drugs, and food chemicals for the pharmaceutical industry. Through its diverse business divisions, the company handles specialty chemicals, Active Pharmaceutical Ingredients (APIs), and intermediates that serve multiple industries including aluminum, steel, textiles, pharmaceuticals, food, and adhesives. The company's product portfolio includes essential chemicals like Caustic Soda Flakes, Citric Acid Monohydrate, and Hydrogen Peroxide.
Operating with a lean team of 9 employees as of June 2024, the company maintains three distinct business segments: specialty chemicals and APIs for pharmaceutical and industrial clients, food chemicals with in-house repackaging and distribution capabilities, and laboratory chemicals offering comprehensive solutions. Their business model encompasses indenting, sourcing, make-to-order outsourcing, and the distribution of branded food preservatives and chemicals through their dedicated distribution network, ensuring reliable bulk supply delivery to their customers.
Citichem India plans to strategically deploy the net proceeds from its IPO across four key areas that aim to strengthen its operational capabilities and support future growth. The funds will be primarily channeled into capital expenditure for property acquisition, enhancing its logistics infrastructure through the purchase of transportation vehicles and accessories, supporting general corporate initiatives, and covering the various expenses associated with the IPO process itself. This allocation reflects the company's focus on expanding its physical presence while simultaneously bolstering its distribution capabilities.
Citichem India Limited reportedly saw an annual dip of 6% in its revenue and while the Profit After Tax (PAT) saw a yearly increase of 208%, during the financial year ended March 31, 2024.
As of March 31, 2024, the key performance indicators reflect the company's financial health with a Return on Equity (RoE) of 15.42%, Return on Capital Employed (ROCE) at 21.47% and a Debt-to-Equity ratio of 0.15. The Return on Net-Worth (RoNW) stands at 15.42%, and the PAT Margin was 5.70%. The company’s market capitalisation is ₹47.60 crore.
| Period Ended | June 30, 2024 | March 31, 2024 | March 31, 2023 | March 31, 2022 |
| Revenue | 149.07 | 1,960.58 | 2,094.07 | 8,528.00 |
| Assets | 6,851.56 | 6,932.79 | 7,972.53 | 9,142.69 |
| Net Worth | 745.06 | 725.11 | 613.27 | 577.01 |
| Profit After Tax | 19.95 | 111.83 | 36.26 | 23.94 |
| Reserves & Surplus | 245.06 | 225.11 | 113.27 | 77.01 |
| Total Borrowing | 108.21 | 108.21 | 109.65 | 110.62 |
Amount in ₹ crores
The pre-IPO EPS is at ₹2.24 while the post-IPO EPS will be ₹1.17. Similarly, the pre-IPO Price to Earnings ratio is 31.30 and will become 59.65 post-IPO.
Citichem India is distinguished by its experienced leadership team, with promoters having over 25 years of industry expertise in chemical sourcing and supply to the pharmaceutical sector. The company has built a strong foundation through its scalable business model, featuring a diverse product portfolio that serves multiple industries. Their commitment to quality management is evident in their practice of delivering only quality-certified products. The company has cultivated strong relationships with both suppliers and customers, supported by a dedicated after-sales network and established distribution channels that ensure timely delivery of products.
The company faces several significant challenges, with one of the most pressing being its heavy dependence on just five key customers who generate approximately 95% of its revenue, creating substantial business risk. There are also pending legal proceedings against various stakeholders including the company, directors, promoters, and group companies, which could potentially impact their reputation and financial performance. The company operates with a notably limited workforce of only 9 employees as of June 2024, and faces operational risks due to their handling of hazardous chemicals. Additionally, they are vulnerable to regulatory challenges, market price fluctuations, and have a heavy reliance on U.S.-based customers, which exposes them to international compliance requirements.
Stepping into Citichem India Limited's market journey at its nascent stage offers investors a chance to be part of a pharmaceutical supply chain story as it unfolds. However, prudent investors would do well to dive deep into the company's fundamentals - from its operational history and financial metrics to industry dynamics and expansion plans. Whether you're intrigued by this pharmaceutical trader's potential or drawn to the SME segment of the market, take time to scrutinize the offer document and consider professional guidance to ensure this investment aligns with your portfolio goals and risk tolerance. After all, in the dynamic world of chemical trading, understanding both the opportunities and challenges is key to making well-informed investment choices.
What is the Citichem India IPO?
The Citichem India Limited IPO is an BSE SME offering consisting of 18 lakh equity shares with a face value of ₹10, aiming to raise to ₹12.60 crores. The share price has been set at ₹70 per share, with a minimum order quantity of 2000 shares. This IPO will be open for subscription from December 27, 2024, to December 31, 2024. Horizon Management Private Limited is the book-running lead manager, Kfin Technologies Limited is the registrar while Aftertrade Broking Private Limited is the market maker.
When will the Citichem India IPO open?
The Citichem India Limited IPO will open for subscription on December 27, 2024, and will close on December 31, 2024.
When is the Citichem India IPO listing date?
The tentative listing date for the Citichem India Limited IPO is Friday, January 3, 2025.
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