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Neogen Chemicals Ltd.

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ABOUT

  • Neogen Chemicals Ltd. a public limited company founded in 1989 has been the chief Bromine producers of the country. Founded by Mr. H T Kanani a chemical engineer by profession is also known as the “Bromine man of India” for his long association with it
  • Neogen Chemicals Ltd. specially deals with industry –specific requirements and it is the largest manufactures of bromine derivatives, inorganic lithium salts and Grignard compounds in India. Apart from it the company also exports its material to around 27 countries in the world and has some Generic companies as its fixed customers.
  • The company has two main manufacturing units based in Mahape, Navi Mumbai in Maharashtra and Karakhadi, Vadodara in Gujarat. The head-quarter of the company is located in Thane, Maharashtra.     
  • Alkylation, Acylation, Friedel Craft, Couplings Chlorination are among the few other chemistry Neogen Chemicals Ltd works into.  

BUSINESS STRATEGY

  • Expanding our production capacities – The Company has made a stable record of growth since the time of its formation and is also broadening its product range time to time. The companies aim is to double its organic chemical manufacturing capacity from 130,400 litres to 256,400 litres. The company is also working towards a green-field manufacturing facility through which it can increase its inorganic chemical products.
  • Increasing our contract manufacturing portfolio – NEOGEN Chemicals believing in its excellent service aims towards having more contract manufacturing based business. The company believes that this will help the company get more long term based customers and will create good margins for the company. The company currently is already working with some pharmaceutical, agrochemical, aroma and specialty polymer industries on contractual basis.
  • Augmenting growth in domestic and global markets – The Company is generating 50 % of its profit from domestic market and 50% from exports. The major revenue generation is through industries like pharmaceutical, agrochemical, refrigeration and specialty polymer industries. The company is sure of its increasing demand and is involving its R&D team to work towards to generate a robust portfolio of the company and increase its sales.
  • Improving financial performance through focus on operational efficiencies and functional excellence – The Company is initiating its work following its business strategies which is benefitting the company by reducing the cost of production. The company believes that developing its in-house capabilities and supply chain management will help the company grow bigger in future. The company wants to make best use of its operational excellence.
  • Focus on advanced specialty intermediates which offer higher value addition The Company besides its key work of producing bromine compounds has also started to work on combining bromination with other chemistries. This step taken by Neogen chemicals have reduced the work of its customer for they no more need to produce it internally which is saving their production time. Through this Neogen Chemicals is emerging as a customer friendly brand at the same time able to generate higher profit margin.

INITIAL PUBLIC OFFER (IPO)

Bid/Offer Opens On April 24,2019
Issue Type Book Built Offer
Bid/Offer Closes On April 26,2019
Issue Price Rs 212-Rs215 Per Equity Share
Issue Size Fresh Issue of Rs 700 million & Offer for Sale of 29,00,000 Eq Shares
Face Value Rs 10 per Equity Share
Market Lot 65 Equity Shares
Listing At BSE & NSE

PROMOTERS

  • HARIDAS THAKARSHI KANANI
  • HARIN HARIDAS KANANI

SHAREHOLDING PATTERN

Name of Shareholders

Number of Equity Shares Percentage of Share Capital (%)
Haridas Thakarshi Kanani 13,999,680 69.72
Beena H. Kanani 2,226,711 11.09
Harin H. Kanani 2,000,000 9.96
Pallika H. Kanani 1,000,000 4.98
Anurag Surana 300,000 1.49
Kagashin Global Network Private Limited 300,000 1.49
Kalpana H. Mehta 34,122 0.17
Pragna J. Thacker 16,061 0.08
Mitesh Anil Parikh 15,000 0.07
Khorshed J. Ghadiali 12,061 0.06
Total 19,903,635 99.13

INDUSTRIAL ANALYSIS

GLOBAL SPECIALTY CHEMICALS MARKET SIZE

APAC SPECIALTY MARKET SIZE AND FORECAST -2017 TO 2018

REGION-WISE PHARMACEUTICAL INTERMEDIATES’ MARKET SIZE ($ MILLION)-2018 & 2024

OVERALL INTERMEDIATES MARKET SIZE IN INDIA

TREND IN BULK DRUGS EXPORT FROM FISCAL 2015 TO FISCAL 2021P IN VALUE TERMS

DOMESTIC CROP PROTECTION MARKET

PESTICIDES EXPORT TO GROW AT A HEALTHY PACE

DOMESTIC HVAC MARKET SIZE

COMPANY ANALYSIS

FINANCIAL OVERVIEW

(Figures in millions)

Year Total Income Net Profit Total Assets Long Term Borrowing Total Expenses
As at 31 March 2014 803.14 36.43 629.33 47.59 741.25
As at 31 March 2015 942.80 50.85 687.56 47.33 844.15
As at 31 March 2016 1090.47 51.80 804.82 47.70 1005.66
As at 31 March 2017 1217.75 76.83 1523.15 367.61 1103.07
As at 31 March 2018 1646.75 104.97 1800.53 384.95 1473.78
As at 31 Dec 2018 1596.87 122.21 2374.06 440.62 1427.66
  • Total Income

  • Net Profit

  • Total Assets

  • Long Term Borrowing

  • Total Expenses

STASTICAL OVERVIEW

Year RoNW( %) EPS (Rs)
2016 18.80 2.59
2017 18.31 3.84
2018 20.97 5.25

MAJOR INDUSTRY PLAYER & COMPARISION

COMPARISON FOR THE YEAR ENDED MARCH 31, 2018

Name of Company Revenue from operation(in Rs million) Basic EPS (Rs) P/E

RoNW

(%)

NAV

(Rs)
Neogen Chemicas Ltd. 1,640.12 5.30 - 22.98 25.12
Aarti Industries Ltd. 36,993.10 38.92 40.42 22.40 186.37
Atul Industries 31,475.60 91.16 39.19 13.13 740.87
Navin Flourine International Ltd. 8,860.58 36.34 19.57 19.96 196.55
Paushak Ltd. 1,047.50 66.95 30.29 21.89 352.75
Vinati Organic Ltd. 7,558.74 27.93 58.86 19.49 155.02

Revenue from operation(in Rs million)

Basic EPS (Rs)

P/E

RoNW(%)

NAV(Rs)

REFERENCES

  • Red Herring Prospectus of Neogen Chemicals ltd. (gov.in)
  • neogenchem.com

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