Tatva Chintan makes solid debut; lists at 95% premium over issue price

The stock price of the specialty chemicals more-than-doubled or zoomed 133 per cent at Rs 2,534.20 against its issue price of Rs 1,083 within a few seconds of its listing on the NSE

Tatva Chintan Pharma Chem made a stellar stock market debut, with its shares getting listed at a whopping 95 per cent premium over its issue price of Rs 1,083 per share on the National Stock Exchange (at Rs 2,111.85) and BSE (at Rs 2,111.80).

The stock of the specialty chemicals more-than-doubled or zoomed 133 per cent at Rs 2,534.20 within a few seconds of its listing on the NSE. On the BSE, the stock hit an intra-day high of Rs 2,486.30 post its listing. At 10:02 am, it was trading at Rs 2,289.65 on the NSE. A combined 2.7 million equity shares had changed hands on the counter on the NSE and BSE till the time of writing of this report.

Tatva Chintan Pharma Chem's initial public offer (IPO) had received robust response from the investors. It had garnered 180 times subscription, making it the second-most subscribed offering of the year. The 3.26-million share offering garnered bids for 588 million shares, generating demand worth Rs 63,713 crore. The institutional investor portion of the IPO was subscribed 185 times, the high networth individual (HNI) portion was subscribed 512 times and the retail portion garnered 35 times subscription.

The company intends to further diversify into products with prospects for increased growth and profitability. Tatva Chintan plans to continue to increase offerings in current business segments as well as diversify into new products by tapping into segments, which in the view of the management, have attractive growth prospects.

Most brokerages had recommended their clients to subscribe to the IPO citing reasonable valuations.

"We like TCPCL due its leadership position, wide product portfolio, strong client relationship and high entry barriers. The company is expected to witness strong growth for next 2-3 years given its expansion plans. It is well placed to tap opportunity in the fast growing specialty chemical space with increasing focus on green chemistry by leveraging its strong R&D capabilities," Motilal Oswal Financial Services had said in an IPO note.

Those at Shareskhan said: TCPCL posted strong performance in FY2021 with revenues growing by 14 per cent year-on-year (y-o-y) and the operating profit growing by 20 per cent y-o-y (OPM expansion of 100bps y-o-y at 22 per cent). The reported PAT grew by 38 per cent y-o-y to Rs 52 crore in FY2021. TCPCL has a strong earnings track record with 60 per cent PAT CAGR over FY2019-FY2021 and RoE of 31 per cent. The company has a robust earnings growth outlook with strong market share, consistent focus on R&D, greater control over cost and strong long-standing relationships with key customers.

Tatva Chintan is a specialty chemicals manufacturing company engaged in the manufacture of a diverse portfolio of structure directing agents (SDAs), phase transfer catalysts (PTCs), electrolyte salts for super capacitor batteries and pharmaceutical and agrochemical intermediates and other specialty chemicals (PASC). Apart from customers in India, the company also exports products to over 25 countries, including the US, China, Germany, Japan, South Africa, and the UK. As on March 31, 2021, it manufactured over 154 products.