Bhatia Colour Chem Limited was founded and incorporated in 2021. The company is engaged in the business activity of being a specialized company in the trading and the manufacturing of the chemicals along with the dyes and other processing and auxiliaries. In this article, we take a closer look at the Bhatia Colour Chem IPO details and its possible future prospects.
Bhatia Colour Chem Limited also carries out Value-Added Printing Products, special commodity chemicals and textile auxiliaries. The company is also engaged in the Foil Binders, Printing Inks, Glitters, and Zari Binders. All these products the company makes as per the demand and customization been required by the company’s clients. The central core sector of the company’s operation is to provide chemicals for the printing that has been done on the textiles of Polyester and Cotton. Bhatia Colour Chem Limited has a highly diversified product portfolio that strengthens its core operation on both top-line and bottom-line aspects.
OBJECTS OF THE IPO ISSUE:
- Prepayment of all the earlier outstanding loans of the company, which be availed on a consolidated basis.
- To meet the general corporate targets.
- To fund the working capital requirement along with the expenditures.
- The company also intends to fund the strategic acquisition of Polychem Exports Limited.
BHATIA COLOUR CHEM IPO DETAILS:
Recently the company Bhatia Colour Chemical received the SEBI’s approval to float their IPO in the market. The company’s IPO is of Book Building Fixed Price Issue Type, with the price band being fixed at Rs.80 along with a market lot of 1600 equity shares. Check Day by Day IPO Subscription Details (Live Status)
The company’s stock will be listed on the BSE – SME platform, where the issue size is 5,000,000 equity shares.
|IPO Opening Date||March 14, 2022|
|IPO Closing Date||March 16, 2022|
|Issue Type||Fixed Price Issue type IPO Offer|
|Face Value||Rs. 10 per equity share|
|IPO Price||Rs. 80 per equity share|
|Market Lot||One lot of 1600 equity shares|
|Minimum Order Quantity||1600 equity shares|
|Maximum Order Quantity||1600 equity shares|
|Minimum Order Price||Rs. 128,000|
|Maximum Order Price||Rs. 128,000|
|Listing At||BSE – SME platform|
|Issue Size||5,000,000 equity shares of the company with a face value of Rs.10, which aggregates to Rs. 40.0 crores|
|Fresh Issue||5,000,000 equity shares of the company with a face value of Rs.10, which aggregates to Rs. 40.0 crores|
|Retail Shares Offered||50% quota|
|NII (HNI) Shares Offered||50% quota|
|Finalisation of the Basis of Allotment||Coming soon|
|Initiation of the refunds||Coming soon|
|The Credit of shares to the Demat Account||Coming soon|
|Listing Date||Coming soon|
- Bhatia Colour Chem Limited has an experienced promoter base with the very sound market knowledge and a team of highly known people in the company’s management, technical, and operational categories.
- The company’s greatest strength lies in its ability to be a specialized company in developing and marketing value-added printing products.
- Bhatia Colour Chem Limited has cordial relations with its clients and raw materials suppliers.
- The company has a strong foundation for the formulation of chemicals to manufacture quality assured products.
- The company is under a very strong parentage of the Bhatia Group. The Bhatia Group in the past has demonstrated their resourcefulness. The Group continuously carries out an infusion of unsecured loans to promote the company’s business.
- The company also registered a shortening of their working capital structure and a significant reduction in the gross current assets. The company also reported an improvement in the overall gearing ratio of the company to below 1.00 x on a long term basis.
- The company will significantly benefit from the boom in the chemical and speciality chemical sector and the emergence of India as an International giant in this sector.
- The company has very diversified business activities under their business operation.
WEAKNESS AND THREATS:
- The company’s financial performance doesn’t justify its business. The financial ratios are on a declining trend.
- Based on the data been mentioned in the financial data, the IPO offer of the company looks exorbitantly overpriced.
- Another major threat is the total equity dilution. It is more than 40% raising concern of the promoter base and belief of the promoters in the company itself.
- The company is engaged in a highly fragmented and highly competitive market where it faces a lot of competition from organized, well-established, unorganized yet growing firms in the sector.
- The company also don’t have any active hedging policy. It is essential for its import obligations.
- The company registered a significant decline in the scale of its operations. It also has a highly deteriorated capital structure and a fragile matrix for the debt coverage indicator.
- Bhatia Colour Chem Limited’s sustainability of the operational margins is also another threat to the company.
- The company’s strength remains constrained by its very sublime and thin profitability margin due to its trading nature of operations.
- It also faces threats of highly stretched liquidity, forex fluctuation risk and volatility in commodity prices.
- The company’s liquidity is very fragile because it has an elongated operating cycle supplemented with a very low cash accrual. In addition, the company also has a high debt repayment obligation. As a result, the company strongly relies on the continued infusion of funds by the promoters.
FINANCIALS OF THE COMPANY:
|Particulars||For the year or as on the date with the amount in the lakhs|
|Profit After Tax||35.30|
- Earnings Per Share / EPS of the company: Rs 1.43
- Pre-IPO Price/Earnings / PE ratio: 55.90
- Return on Net Worth/ RONW: 2.12%
- Net Asset Value / NAV: Rs. 23.04 per equity share
- The average acquisition cost paid up to the promoters is defined as the cost at which the supporters have bought the company’s equity shares is Rs. 10.75.
The promoters of the company are as follows:
- Mr Bharat Bhatia
- Mr Ramesh Bhatia
- Mr Ravi Bhatia
|Pre – Issue Share Holding||74.65%|
|Post Issue Share Holding||44.14%|
COMPANY CONTACT INFORMATION:
Bhatia Colour Chem Limited
Plot No. A/2/12,
Road No. 1 Udhna Udhyog Nagar,
Sangh, Udhna, Surat – 394210,
BHATIA COLOUR CHEM IPO REGISTRAR:
Bigshare Services Pvt Ltd
Phone: +91-22-6263 8200