Prasol Chemicals Ltd IPO Review : Not Applying ❌ ❌ ❌
– The Company makes Acetone and Phosphorus based Speciality Chemicals useful in Industries such as Pharma, Agrochemicals, Performance Chemicals, PICA and Home/Personal Care.
– Serves to Reputed Clients, Approval takes 1-4 years before selling the products and hence customer stickiness is good in the business
– Two Manufacturing facilities, Utilisation is near 73%. There have been many incidents in past around closure and halting of their facilities
– IPO Proceeds contain an OFS: 420 Cr and Fresh Issue: 80 Cr; 60 Cr will be used fot debt repayment and rest for GCP
– Numbers are Good, Balance Sheet is decent
– Prasol is coming at 48x FY26 PE. No Exaxt peer since Product overlap is minimal. Estimating Forward Numbers is very difficult since Capacity headroom is less and no Major CapEX is visible as of now. Hence Valuations are Looking Really Expensive at IPO Price
– Management Quality is Fine, Anchor Book was Good
– Risks Include: Raw Materials Dependency (75%) from Imports (From China and others), Stringent Environmental and Regulatory Regulations, Competition from Unorganised players and more
▫️ Conclusion
Overall it looks like a Fine Business
But Lack of Clarity on Growth Prospects and High Valuation makes it an unfavourable deal for me at this price
We will skip and focus on Better Options
(Note: Post is Shared for Educational Purposes Only, DYDD before Applying)
