Citichem India Limited

As per financial performance, Citichem India Limited has posted total income / net profits of Rs 85.28 Cr / Rs 0.24 Cr (FY22), Rs 20.94 Cr / Rs 0.36 Cr (FY23), Rs 19.61 Cr / Rs 1.12 Cr (FY24) and Rs 1.49 Cr / Rs 0.20 Cr (Q1 FY25). So as per previous financials data, company has shown decline in sales, but sudden rise in net-profit just before IPO raises doubts and also only Q1 data is provided. Company has posted an average EPS of Rs 1.74 and average RoNW of 10.37% for last three fiscals. Issue is priced at a P/BV of 2.37 as per NAV of Rs 29.49/- as on post issue. If we attribute latest earnings of FY23, FY24 and annualized FY25 on fully diluted equity post issue, then asking price is at a P/E of around 131.27, 42.56 and 59.65 respectively, which looks aggressively priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Horizon Management Private Limited is associated with this SME IPO and this is 12th IPO from the lead manager. From last 10 IPOs, 3 opened below issue price and remaining opened above issue price or at par on the day of listing. As of now from last 10 IPOs, five are trading below issue price and remaining are trading above issue price or at par as on today. ( As on 30.12.24 ) As per financials, Citichem India Limited has shown declining sales, RoNW is 15.42% and P/E is respectively 131.27, 42.56 and 59.65 as per FY23, FY24 and annualized FY25 earnings. So, issue looks aggressively priced, and sudden rise in net-profit just before IPO raises concerns and only financials data upto Q1 FY25 is given. Company is engaged in supplying third party products in organic/inorganic chemicals, bulk drugs, food chemicals, Pharmaceuticals, etc., which is highly competitive and fragmented business segment. Performance of BRLM post listing is average. So, we give AVOID rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Mr. Arif Esmail Merchant
• 2 Mr. Hashim Arif Merchant
• 3 Mrs. Fozia Arif Merchant
• 4 Mrs. Saima Hashim Merchant