Clean Science and Technology Ltd

IPO Size

`1,546.62 Cr

Price Band

`880-900 Per Share

Minimum Lot Size

16 Share

Face Value

`1 Per Share

Employee Discount

NA

Retail Allocation

35%

Issue Open Date

07 July, 21

Issue Close Date

09 July, 21

Listing Date

19 July, 21

About the Company:

Clean Science and Technology is a globally focused entirely on developing newer technologies using in-house catalytic processes, which are eco-friendly and cost competitive. This has enabled them to emerge as the largest manufacturer globally of certain specialty chemicals in terms of installed manufacturing capacities as of March 31, 2021. The company has continued its focus on product identification, process innovation, catalyst development, significant scale of operations as well as our measures towards strategic backward integration that have all contributed to their success as one of the fastest growing and among the most profitable specialty chemical companies globally. The company’s name was changed to ‘Clean Science and Technology Private Limited’ in 2006, to reflect our vision of focusing on sustainable chemistry led by innovative technology and lower effluents. They manufactures functionally critical specialty chemicals such as Performance Chemicals (i.e. MEHQ, BHA and AP), Pharmaceutical Intermediates (i.e. Guaiacol and DCC), and FMCG Chemicals (i.e. 4-MAP and Anisole). Within 17 years of incorporation, we have grown to be the largest manufacturer globally of MEHQ, BHA, Anisole and 4-MAP, in terms of installed manufacturing capacities.

 

Outstanding Litigation:

S.No. 1 - Company 2 - Directors 3 - Promoters
Entity Name By the Company Against the Company By the Subsidiaries Against the Subsidiaries By the Promoters Against the Promoters
Criminal cases 7 2 - 2 - -
Material civil cases 7 - - - - -
Taxation matters - 1 - - - -
Regulatory Procedings - - - - - -
Amt. (In Million Rs.) 2,081.16 2.38 - Not Quantifiable Non-Quantifiable Non-Quantifiable

 

Financial Statements:

Income Statement (In Millions) FY21 FY20 FY19
Gross Operating Income 5380.71 4301.65 4045.63
Cost of Employee & Inventory 1671.4 1602.51 1960.77
Other Expenses 863.34 737.63 608.84
EBITDA 2845.97 1961.51 1476.02
Depreciation 172.05 137.14 110.33
Interest  0.91 1.21 0.33
Profit Before Tax 2673.01 1823.16 1365.36
 Tax 689.21 426.85 388.78
Profit After Tax 1983.8 1396.31 976.58

Recommendation

As per CA Ajay Chouhan, SEBI Registered Research Analyst, recommendation is to ‘Subscribe’ for ‘Long Term’ and ‘Listing Gains’ too. The specialty chemical company is a leading manufacturer of Performance Chemicals (i.e. MEHQ, BHA and AP) and generates 62.32% revenues from them. The product portfolio of the company is diversified to Pharmaceutical intermediates and FMCG chemicals too. Bayer AG, Genex Laboratories Limited, Nutriad International NV, SRF Limited, Vinati Organics are a few of its customers. On the financial front, Clean Science and Technology has been able to increase their revenues by 15.3% in last two years. Company has been able to generate 53% EBITDA margins due to higher efficiency while profit after tax is increased by 42.52 in last two years. Company is almost debt-free and doesn’t have any interest obligations. Return on Capital Employed is 73.89% while Return on Equity stood at 36.76%. Company has strong cash flows and continuously spending on fixed assets for capacity expansion to meet the aggregate demand. Considering the upper price band and FY20 Earning Per Share (EPS), the company is demanding a P/E multiple of 48.2x, much in-line with the listed peers.

Promoter of the Company

The promoters of the company are Ashok Ramnarayan Boob, Krishnakumar Ramnarayan Boob, Siddhartha Ashok Sikchi, and Parth Ashok Maheshwari

Peer Comparison

In the listed space, the company faces tough competition from Rossari Biotech, Fine Organics, Camlin Fine Sciences, PI Industries and Navin Fluorine Limited.

Objectives of the Issue

Offer for Sale

The issue size of 1,546.62 crores is a complete Offer for Sale comprises sale of up to 17.18 million shares by Ashok Ramnarayan Boob, Krishnakumar Ramnarayan Boob, Siddhartha Ashok Sikchi and Parth Ashok Maheshwari.

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