Shiva Pharmachem Limited IPO

Last Updated on October 10, 2023 by BFSLTeam BFSLTeam

Have you always wished to invest in the chemicals industry? If yes, then check out the details of Shiva Pharmachem IPO. The company has recently filed its preliminary papers with the market regulator SEBI (Securities and Exchange Board of India) to launch an Initial Public Offering.

Shiva Pharmachem is a reputed name in the chemicals industry as it’s a key player in acid and alkyl chloride manufacturing. The business was established way back in 1999 and the company has over 20 years of experience in the chemical industry. 

If you wish to invest in Shiva Pharmachem’s IPO, give this blog a quick read. You’ll find all the important details you’ll need to form an informed investment decision. 

About the Company 

Shiva Pharmachem is the biggest manufacturer of acid and alkyl chlorides by volume in India in 2022. It’s an ISO-certified company headquartered in Vadodara, Gujarat specialising in various hazardous chemicals. As of FY23, the company produces 100 speciality chemicals, including alkoxy ketones,  aliphatic chlorides, aromatic nitriles,  thiocarbamates, isocyanates, herbicide safeners and more.

Shiva Pharmachem lays a lot of emphasis on health, safety, and environmental compliance and has embedded these factors into its products. The company constantly strives to ensure that its product offerings are safe and stand the test of time. They take care to ensure that their products have the least impact on the environment.

EcoVadis has audited and certified the company for CSR (Corporate Social Responsibility). Shiva Pharmachem received a score of 76 for the Luna manufacturing facility and 80 for the Dahej manufacturing facility concerning TFS (Together for Sustainability).

The company started production in 2001 and since then, has maintained an unwavering focus on high-quality products and customer satisfaction. This has automatically resulted in steady growth and expansion. Shiva Pharmachem has three manufacturing units, two of which are located in India and one in Hungary. 

Objectives and Details 

Shiva Pharmachem has submitted a Draft Red Herring Prospectus with SEBI for its maiden public issue. The IPO is a complete OFS (Offer for Sale) of up to Rs. 900 crore by the promoters and promoter groups of Shiva Pharmachem.

According to information stated in its DRHP, Rahul Rakesh Agrawal and Vishal Rakesh Agrawal will sell off shares up to Rs. 383 crores each. On the other hand, Geetganga Investment Private Limited will sell off shares worth Rs. 134 crore. The company will not receive any proceeds from its OFS and only benefit from an increase in visibility with this listing. 

This OFS will be made through the book-building process. 50% of shares will be available to Qualified Institutional Buyers, 15% of shares will be allocated to non-institutional investors and 35% of the shares will be allocated to retail investors. These shares will be listed on both NSE and BSE.

Strengths 

It’s always a good idea to check the strengths of a company before investing in its IPO. It will help you understand the potential of this company. 

Here are the strengths that set Shiva Pharmachem apart from its competitors: 

• Shiva Pharmachem is a market leader across various speciality chemical products. 
• The company maintains a strong focus on technology, R&D, innovation, and automation. 
• Shiva Pharmachem enjoys a loyal customer base spread across 22 countries. It has a long-standing relationship with the customers which has contributed to its growth. 
• Strategic locations of its manufacturing facilities and logistics infrastructure which are highly well-connected with one another have contributed to the growth of the company. 
• Another factor to consider here is that this company has a strong focus on sustainability. The company’s unwavering commitment to environment, health, and safety ensures that it’s on a track of sustainable growth. 
• The company has performed well financially consistently for the previous few years. 
• The promoters, management, and Board members of Shiva Pharmachem are highly experienced and have steered the company on its path to success. 

Risks Involved 

While it’s important to take into account the strengths of a company, it’s equally important to understand what are the risks involved: 

• The company derives a major portion of its revenue from its top 10 customers. Its single largest customer contributes more than 18% of its revenue from operations. If Shiva Pharmachem loses any of these customers or if there’s a reduction in any of their purchases, it will have a direct negative impact on the overall business of Shiva Pharmachem. 
• Demand for the company’s products outside India is subject to international market conditions and foreign regulatory risks. 
• A substantial portion of its revenues comes from customers in the agrochemicals sector. If this sector sees a downfall, Shiva Pharmachem’s business may be adversely impacted. 
• Shiva Pharmachem’s R&D activities actively contribute to its success. If the company is unable to develop new products or spends too much money on R&D, it can lead to major losses.

Additional Read: Lohia Corp Ltd IPO

Summary 

Summing up, you can consider investing in the IPO of Shiva Pharmachem which is one of the largest manufacturers of acid and alkyl chlorides. Don’t forget to check the strengths and risks involved when you decide to invest in this IPO.

Moreover, keep an eye on our website to get the latest information on Shiva Pharmachem’s IPO. 

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