Technichem Organics Limited

As per financial performance, Technichem Organics Limited has posted total income / net profits of Rs 67.79 Cr / Rs 3.42 Cr (FY22), Rs 51.02 Cr / Rs 1.73 Cr (FY23), Rs 46.97 Cr / Rs 4.73 Cr (FY24) and Rs 14.88 Cr / Rs 1.40 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 2.81 and average RoNW of 20.25% for last three fiscals. Issue is priced at a P/BV of 3.33 as per NAV of Rs 16.51/- as on 30.06.24. 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 55.09, 20.15 and 16.96 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Shreni Shares Limited is associated with this SME IPO and this is 35th IPO from the lead manager. From last 10 IPOs, all opened above issue price or at par on the day of listing. As of now from last 10 IPOs, all are trading above issue price or at par as on today. ( As on 31.12.24 ) As per financials, Technichem Organics Limited has shown declining sales, RoNW is 24.09% and P/E is respectively 55.09, 20.15 and 16.96 as per FY23, FY24 and annualized FY25 earnings. So, issue looks fully 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 the business of manufacturing of a wide range of chemicals, Pyrazoles, Pyrazolones, Speciality Chemicals, Pigment & Dye Intermediates and Air Oxidation Chemistry, which is highly competitive and fragmented business segment. Performance of BRLM post listing is good. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Mr. Bharat Jayantilal Pandya
• 2 Mr. Pandya Anilkumar Jayantilal