Archean Chemical IPO

Archean Chemical Industries limited is country’s top speciality marine chemical manufacturer, specialising in the production and export of bromine, industrial salt, and potassium sulphate to clients across the globe. Archean Chemical IPO will hit the stock market in August 2022.

About Archean Chemical

As per Frost & Sullivan, Archean Chemical Industries limited will be India’s top exporter of bromine and industrial salt in Fiscal 2021, and their production costs in both bromine and industrial salt will be among the lowest in the world (Source: F&S Report commissioned by the company).

Archean Chemical create their commodities at their plant in Hajipir in Gujarat, where they make their products from brine sources in the Rann of Kutch on Gujarat’s coast.

Archean Chemical sold their products to 13 worldwide customers in 13 nations and 29 local customers as of September 30, 2021.

Their bromine is often used in pharmaceuticals, agrochemicals, water treatment, flame retardants, additives, oil & gas, and energy storage batteries as a critical initial level element.

Major Products

Their sales of bromine accounted for 59.22, 46.49, 35.43, and 39.83 percent of their revenue from operations in the six months ended September 30, 2021, as well as in 2021, 2020, and 2019.

Their sales of industrial salt accounted for 40.72, 49.10, 57.88, and 53.02 percent of their revenue from operations, respectively, and their sales of sulphate of potash accounted for 0.05 percent, Bromine is extracted from saltwater, salt lakes, inland seas, and brine wells as soluble salts.

After removing the majority of the sodium chloride and potash from brine, bromine is generated. Industrial salt is a key raw ingredient in the production of sodium carbonate (soda ash), caustic soda, hydrochloric acid, chlorine, and bleaching powders in the chemical industry.

Exports

They are the leading exporter of bromine from India and command a leadership position in Indian bromine merchant sales by volume in Fiscal 2021.

They exported 46.29, 46.10, 39.79, and 51.22 percent of their bromine production abroad in the six months ended September 30, 2021, as well as in Fiscal 2021, 2020, and 2019.

The remaining bromine they produce is sold on the domestic market. Bromine is a very caustic, dangerous, and toxic chemical, and handling it necessitates a high level of specialist knowledge, which they have acquired.

Bromine transportation is also hazardous, necessitating the use of nickel and lead coated ISO containers, of which they had 226 (owned and rented) for their export operations as of February 15, 2022.

Archean Chemical IPO

Archean Chemical Industries Limited, headquartered in Chennai has submitted Draft Red Herring Prospectus(DRHP) to Securities and Exchange Board of India(SEBI) for initial public offering (IPO) of 1,000 crores & 19,071,288 equity shares on 18 February 2022.

The offer includes a fresh issue of 1,000 Crores and there is offer for sale (OFS) of 19,071,288 equity shares by the promoters mentioned in the DRHP. They are looking for a Pre-IPO placement of 200 crores in this issue.

They are now waiting for approval from Securities and Exchange Board of India(SEBI) to float the initial public offering (IPO) in the market.

Financials Trends

Particulars	For the year/period ended ( in Cr.)
	30-Sep-21	31-Mar-21	31-Mar-20	31-Mar-19
Total Assets	1,488.65	1,432.42	1,428.60	1,260.51
Total Revenue	459.09	754.79	617.00	572.91
Profit After Tax	58.06	66.61	(36.24)	39.97

Basic and Diluted Earnings Per Share

Financial Period	Basic EPS (in INR)	Diluted EPS (in INR)	Weight
Financial Year 2021	5.44	5.44	3
Financial Year 2020	(3.51)	(3.51)	2
Financial Year 2019	6.45	6.45	1
Weighted Average	2.96	2.96
30 Sep. 2021	5.62	5.62

Objects of the Issue

• Prepayment / repayment of all or a portion of the outstanding borrowings of the company to be availed on consolidated basis.
• To meet common corporate objectives.

Basis of the offer

The following are among the parameters and key strengths that go into determining the Offer Price:

1. In bromine and industrial salt, they have a leading market position, are expanding, and are growing.
2. The specialty marine chemicals business has high entry hurdles.
3. Infrastructure is in place, and production is integrated and cost-effective.
4. Place an emphasis on the environment and safety.
5. With a global customer base, it is India’s largest supplier of bromine and industrial salt.
6. Financial performance that is constant and strong.
7. Management team with deep expertise, promoters, financial investors, and stakeholders.

Archean Chemical Industries Peer Comparison

S. No.	Face Value	Company Name	PE
1	10	Tata Chemicals Limited	89.15
2	2	Deepak Nitrite Limited	36.66
3	5	Aarti Industries Limited	32.45
4	10	Neogen Chemicals Limited	114.36

Note

• All of the financial data for the listed industry peers indicated above is on a consolidated basis (unless otherwise stated) and comes from the relevant company’s annual reports for the year ending March 31, 2021 that were submitted to stock exchanges.
• The P/E Ratio was calculated by dividing the closing market price of equity shares on February 17, 2022 by the Basic EPS.

Archean Chemical IPO Details

IPO Opening Date	August 2022
IPO Closing Date	August 2022
Issue Type	Book Building
Face Value	2 per share
IPO Price	0 to 0 per equity share
Market Lot	–
Min Amount	–
Listing At	BSE, NSE
Issue Size	–
Fresh Issue	1,000 Crore
Offer for Sale	19,071,288 Equity Shares

Archean Chemical IPO Date

Archean IPO opening date is August 2022, and the closing date is August 2022. The Archean Chemical Industries issue may list in August 2022.

IPO Opening Date	August 2022
IPO Closing Date	August 2022
Basis of Allotment Date	August 2022
Initiation of Refunds	August 2022
Credit of Shares to Demat Account	August 2022
IPO Listing Date	August 2022

Basis of Allotment

Type	% of Offer	Basis of Allotment
Qualified Institutional Buyer	75	Roughly  equivalent
Non Institutional Investor	15	Roughly  equivalent
Retail	10	Minimum 1 lot based on availability

Archean Chemical Industries IPO Status

Allotment of equity stocks subject to the Fresh Issue and transfer of the Promoter Selling Shareholders’ OFS Stocks to the winning Bidders subject to the Offer for Sale. Nevertheless, the status of the allotment has yet to be revealed.

Here, you can find the Allotment Status of Archean Chemical Industries IPO.

Archean Chemical IPO GMP

Archean Chemical Industries IPO Grey Market Premium is 0. You can check out GMP of Other IPOs on below Links:

Date	GMP (in Rs)	Subject to Sauda	Kostak (in Rs)
August 2022
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Check Out the GMP of all Other IPOs

IPO Grey Market Premium

Archean Chemical Industries IPO Review

Archean Chemical Industries IPO review will depend on the price band which will be announced after SEBI approval. Whenever it will be announced we will update you regarding review of Archean Chemical IPO is good or bad.

Archean Chemical Industries IPO Risk

1. Major customers account for a considerable portion of company revenue.
2. They face specific hazards as a result of their operations, which include the creation, use, and storage of a variety of hazardous compounds.
3. Noncompliance with and changes to safety, and labour legislation, and other applicable rules, may have a negative impact on their operations.
4. As of March 18, 2017, their debt was restructured, with overdue principle and interest totaling INR 177.41 million with certain institutions as of March 18, 2017.
5. The impact of the COVID-19 pandemic is unknown on their business.
6. Their business will suffer if they do not successfully create our new bromine derivative products or continue to expand their product portfolio in a timely and cost-effective manner.

Other Threats

1. They run their production facility and brine reserves on land parcels that the Gujarat government leased to them, and those land leases have already expired.
2. Their reliance on three main products for the majority of their sales could be detrimental to their firm.
3. To safeguard their intellectual property, they use a combination of trade secrets, copyright laws, and contractual constraints.
4. Because their export sales and a percentage of their expenditures are denominated in foreign currencies, exchange rate swings may have a negative impact on their firm.
5. They rely on the services of third-party logistics providers.
6. Litigation against their company and promoters is currently pending. Any negative decision in such processes have a negative impact on their business.

Manufacturing Facility

They operate an integrated production plant in Hajipir, Gujarat, which is on the northern fringe of the Rann of Kutch brine deposits, for their bromine, industrial salt, and sulphate of potash operations.

Their production plant is close to the captive Jakhau Jetty and Mundra Port, from which they deliver their products to foreign consumers. Their complex, as well as the adjacent salt flats and brine reservoirs, covers an area of about 240 square kilometres.

Their production plant has an installed capacity of 28,500 MT per annum of bromine, 3,000,000 MT per annum of industrial salt, and 130,000 MT per annum of sulphate of potash as of September 30, 2021 and March 31, 2021.

Archean Chemical Industries IPO Brokerage views

Here is the views of different stock brokers regarding this Archean Chemical Industries IPO:

• Yes Securities : Not Updated
• Choice Brokering: Not Updated
• Axis Securities: Not Updated
• IIFL Securities: Not Updated
• Trade swift: Not Updated
• Anand Rathi : Not Updated
• ICICI Securities: Not Updated

Archean Chemical Industries IPO Subscription Status

Date	Day	QIB	NII	Retail	Employees	Total Subscription
August 2022	1
August 2022	2
August 2022	3

Management

They are led by a skilled and experienced leadership team who they believe has the knowledge and vision to manage and build their company.

The combined knowledge and capabilities of their management team enable them to recognise and predict market trends, manage business operations and growth, enhance customer connections, and adapt to changes in client preferences.

In their individual product divisions, their management team focuses on manufacturing, marketing, and potential growth opportunities.

They trust that their promoters’ skills and experience, and also senior management, a skilled workforce, and financial investors and stakeholders, give them a strategic advantage as they seek to expand their manufacturing capacity and product offerings into downstream specialty marine chemicals, as well as existing and new markets.

Promoters

• Chemikas Speciality LLP
• Ravi Pendurthi
• Ranjit Pendurthi

Promoter’s Holding

Pre Issue Share Holding	70.30%
Post Issue Share Holding

Archean Chemical Industries Prospectus