Clean Science and Technology Limited

Incorporated in 2003, Clean Science and Technology Ltd is one of the largest and fastest chemical manufacturers globally situated in Pune, Maharashtra. Company's continued focus on product identification, process innovation, catalyst development, significant scale of operations as well as their measures towards strategic backward integration have all contributed to their success. Company manufactures functionally critical specialty chemicals such as Performance Chemicals (i.e. MEHQ, BHA, and AP), Pharmaceutical Intermediates (Guaiacol and DCC), and FMCG Chemicals (4-MAP and Anisole). Within 17 years of incorporation, company have grown to be the largest manufacturer globally of MEHQ, BHA, Anisole and 4-MAP, in terms of installed manufacturing capacities as of March 31st, 2021. Company's speciality chemicals have a wide range of applications that caters to a diverse base of customers across industries. Company's customers include manufacturers and distributors in India as well as other regulated international markets including China, Europe, the United states of America, Taiwan, Korea and Japan. Bayer AG, Genex Laboratories Limited, Nutriad International NV, SRF Limited, Vinati Organics are a few of its customers. In fiscal 2021, company generated 67.86% of revenues through export outside India. Clean Science has two production facilities at Kurkumbh (Maharashtra) with an aggregated installed production capacity of 29,900 MTPA as of March 31st, 2021. As per financial performance, CSTL has posted total income/net profits of Rs. 247.23 cr. / Rs. 49.04 cr. (FY18), Rs. 404.56 cr. / Rs. 97 cr. (FY19), Rs. 430.16 Cr. / Rs. 134.50 Cr. (FY20) and Rs. 538.07 Cr. / Rs. 201.01 Cr. (FY21). So company has posted consistent high growth over last couple of years. Company has posted an average EPS of Rs. 15.26 and average RoNW of 37.97% for last three fiscals. Issue is priced at a P/BV of 17.71 as per NAV of 50.81/- on 31.03.21. As per FY21 earnings, P/E is around 48. So issue looks fully priced. As per RHP, comparison between the listed peers are shown in above table.  On BRLM's front, three BRLMs are associated with this IPO, and have handled around 49 IPO in last three fiscals. From last 10 IPOs, 2 are opened below issue price and remaining are opened above issue on the day of listing. As of now, all are trading above issue price. ( As on 02.07.21) As per financials, company has shown good growth, RoNW is 37.97% for last three fiscals and issue is priced at P/E of around 48 as per FY21 earnings. In current pandemic situation, speciality chemicals and agrochemicals sector has outperformed market. Also different Make In India efforts by Government, increased locally produced demand. Performance of BRLM is good. So, we are giving SUBSCRIBE rating to this IPO.

• 1 Ashok Ramnarayan Boob
• 2 Krishnakumar Ramnarayan Boob
• 3 Siddharth Ashok Sikchi
• 4 Parth Ashok Maheshwari