Gandhar Oil Refinery (India) Ltd IPO

Last Updated on October 9, 2023 by BFSLTeam BFSLTeam

Gandhar Oil Refinery Ltd filed its draft papers with SEBI last year on 23^rd December to launch its IPO. As per the latest reports, on 23^rd June 2023, the company received an ‘observation letter’ from SEBI, signifying its approval. Gandhar Oil Refinery is a leading producer of white oils, highly refined paraffinic mineral oils used in a variety of industrial applications.

Thus, individuals looking to invest in the oil refining segment can subscribe to the Gandhar Oil Refinery India Limited IPO. To know all its details, keep reading this blog.   

About Gandhar Oil Refinery (India) Ltd

Gandhar Oil Refinery (India) Limited is a leading Indian white oil manufacturing company in terms of revenue. It sells more than 350 products, under its ‘Divyol’ brand, mainly across two segments. They are lubricants, process and insulating oils (PIO) and personal care, healthcare and performance oils (PHPO). 

This company’s products are sourced from leading domestic and international companies. They are used for manufacturing products across various industrial sectors like industrial, healthcare, consumer, automotive, tyres, power and rubber. 

In 2021, in terms of market share, Gandhar Oil Refinery Limited was one of the top global firms in the white oils manufacturing segment. Reports on 30^th June 2022 state that this company has sold its products in more than 100 countries worldwide, catering to 3,500+ customers. 

Its clientele includes some of the top Indian and global organisations like Emami, Dabur, Marico, Patanjali Ayurved, Unilever, Procter & Gamble, etc. The group companies under this organisation are Gandhar Coals & Mines Private Ltd, Gandhar Oil & Energy DMCC and Nature Pure Wellness Private Ltd.

Gandhar Oil Refinery (India) Ltd IPO Details

The Gandhar Oil Refinery India Limited IPO has a fresh issue size of equity shares aggregating up to Rs. 357 crore. In addition, the company has declared an offer for sale of approximately 1,20,36,380 shares by promoters and other shareholders, with a face value of Rs. 2 per share. 

The selling shareholders for this public issue are Mr Ramesh Babulal Parekh, Ms Gulab Parekh, Mr Kailash Parekh, Mr Amitabh Mishra, Green Desert Real Estate Brokers, IDFC First Bank Limited, Fleet Line Shipping Services LLC and Denver Bldg Mat & Décor TR LLC.

Edelweiss Financial Services Limited and ICICI Securities Limited are the book-running lead managers for this public issue. Additionally, Link Intime India Private Ltd will serve as the registrar, whose website investors can visit to check their IPO allotment status.

Gandhar Oil Refinery (India) Ltd is yet to release information regarding its IPO bid opening and closing dates, listing dates, lot size, etc. Now that it has received SEBI’s nod for launching an IPO, the company may announce these dates soon.

Also Read: IPO grading

Gandhar Oil Refinery (India) Ltd IPO Objectives

Gandhar Oil Refinery India Limited plans on utilising the capital generated from its IPO to invest in its material subsidiary, Texol. It plans on prepaying/repaying a loan taken by the latter from Bank of Baroda. The company also aims to make capital expenditures for the following purposes:

• Installing blending tanks in the same facility to expand its white oils capacity
• Expanding the automotive oil capacity in its Silvassa plant
• Increasing production capacity of petroleum jelly and related cosmetic products at its Taloja plant

Funds from the fresh issue will also be used for meeting working capital requirements and other corporate purposes. However, the company will not receive any funds from its OFS. 

Also Read: Benefits of Investing in IPO

Strengths

Before investing in the Gandhar Oil Refinery India Limited IPO, you must understand the strengths and weaknesses of this company. Its strengths are as follows:

• Market leader in 2022 in the Indian white oils manufacturing market
• A wide array of customised products catering to the needs of various industries
• Strong R&D capabilities along with strategically located manufacturing facilities
• A scalable business model with a time-tested risk management framework
• Consistent financial growth between FY 2020 and 2022, with operational revenue increasing from Rs. 2,503.62 crore to Rs. 3,543.31 crore

Risks

These are the risks of investing in Gandhar Oil Refinery (India) Ltd:

• Downturns for the businesses which avail this company’s products can lead to heavy losses
• Failure to maintain product quality standards may result in loss of business and revenue
• Reductions, delays or interruptions in raw material supply can adversely impact the company’s operations and cash flow

Also Read: Risk of investing in IPO

Summary

If you are interested in investing in the Gandhar Oil Refinery India Limited IPO, consider keeping a lookout for its bid opening and closing dates. In the meantime, you can go through the company’s DRHP to make an informed investment choice. 

You should always remember to assess your risk appetite before making an investment. By doing so, you can determine how much you can invest without straining your finances. 

Also Read: How To Apply For An IPO?

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