This recently listed specialty chemicals has zoomed 144% in 28 trading days

Meghmani Finechem was demerged from Meghmani Organics during FY21 to empower the company grow its Chlor-Alkali business

Shares of Meghmani Finechem were locked at the 10 per cent upper circuit at Rs 943.35 on the BSE on Monday on back of heavy volumes with only buyers at the counter. The stock of specialty chemicals was trading at its highest level since its market debut on August 18, 2021. Since listing, in past 28 trading days, the stock zoomed 144 per cent from its opening level price of Rs 386.25 on the BSE.

The trading volumes at the counter jumped over four-fold with a combined 599,252 equity shares changing hands on the NSE and BSE till 01:43 pm. There were a combined pending buy orders for 57,406 shares on both the exchanges, data showed. In comparison, the S&P BSE Sensex was up 1 per cent at 59,373 points.

Meghmani Finechem (MFL) was demerged from Meghmani Organics (MOL) during the financial year 2020-21 (FY21) to empower the company grows its Chlor-Alkali business.

The shareholders of MOL (Face value Rs 1 per share) were allotted shares of MFL (face value of Rs 10 per share) in the ratio of 1,000:94. Considering the face value of both the companies at same price, ratio comes to 94 shares of MFL against 100 shares of MOL.

The company’s Chlor-Alkali business was commissioned in 2009, growing from an installed capacity of 188,000 tonnes per annum (TPA) in 2015 to 315,000 TPA at the close of FY 2020-21. The company is now among the leading players in India’s chlor alkali industry.

The company is India’s fourth largest manufacturer of caustic soda, chlorine and hydrogen and a leading manufacturer of caustic potash, chloromethanes and hydrogen peroxide. MFL is now expanding its product base to include value added derivative products like Epichlorohydrin (ECH) and Chlorinated Polyvinyl Chloride (CPVC), which are a key raw material for multiple end user industries, which are presently catered by 100 per cent import.

For April-June 2021 quarter (Q1FY22), MFL had reported 107 per cent year on year (YoY) growth in profit after tax at Rs 37 crore. Revenues were up 111 per cent YoY at Rs 290 crore, driven by higher sales of Chlor-Alkali (up 92 per cent) and its Derivatives (up 170 per cent). On YoY basis, earnings before interest, taxes, depreciation, and amortization (EBITDA) margin increased by 190 basis points (bps) to 31.9 per cent; absolute EBITDA increased by 124 per cent at Rs 92 crore in Q1FY22.