Paragon Fine And Speciality Chemicals IPO: A Chemical Symphony of Growth

Introduction:

Paragon Fine And Speciality Chemicals IPO has stirred the market with a book-built issue worth Rs 51.66 crores, entirely consisting of a fresh issue of 51.66 lakh shares. The IPO bidding phase unfolded from October 26, 2023, to October 30, 2023. The allotment process concluded on Thursday, November 2, 2023, and the shares were officially listed on NSE SME on November 3, 2023.

Pricing Dynamics:

The price band for the Paragon Fine And Speciality Chemicals IPO was set at ₹95 to ₹100 per share. Retail investors had a minimum lot size of 1200 shares, requiring an investment of ₹120,000. High Net Worth Individuals (HNIs) were required to invest a minimum of ₹240,000 for 2 lots (2,400 shares).

Market Performance Snapshot:

As of December 20, 2023, Paragon Fine And Speciality Chemical Limited (PARAGON) was trading at ₹146.35, reflecting a 7.46% decrease. The stock opened at ₹161.00, reaching a high and low of ₹163.00 and ₹139.95, respectively. The previous close was ₹158.15, and the total traded value stood at 2,24,400 shares.

Key IPO Highlights:

• - IPO duration: October 26, 2023, to October 30, 2023
• - Listing Date: November 3, 2023
• - Face Value: ₹10 per share
• - Price Band: ₹95 to ₹100 per share
• - Lot Size: 1200 Shares
• - Total Issue Size: 5,166,000 shares, aggregating up to ₹51.66 Cr
• - Fresh Issue: 5,166,000 shares, aggregating up to ₹51.66 Cr
• - Issue Type: Book Built Issue IPO
• - Listing At: SME, SME

Equity Landscape:

Pre-issue, Paragon Fine And Speciality Chemicals had 14,400,000 shares. Post the IPO, this figure increased to 19,566,000 shares.

IPO Reservation Dynamics:

The IPO allocated 19.00% to QIBs, 14.24% to NIIs, 33.24% to RIIs, and 28.46% to Anchor Investors. Specifically, 1,470,000 shares were offered to Anchor Investors, and 261,600 shares were reserved for the Market Maker.

IPO Timeline Highlights:

• - IPO Open Date: Thursday, October 26, 2023
• - IPO Close Date: Monday, October 30, 2023
• - Basis of Allotment: Thursday, November 2, 2023
• - Initiation of Refunds: Friday, November 3, 2023
• - Credit of Shares to Demat: Monday, November 6, 2023
• - Listing Date: Friday, November 3, 2023
• - Cut-off time for UPI mandate confirmation: 5 PM on October 30, 2023

Promoter Holdings:

The promoters of the company include Dr. Pravinchandra Jasmat Vasolia, Kishorkumar Panchabhai Patolia, Vallabh Ratanji Savaliya, Rutesh Vallabhbhai Savalia, and Shivam Kishorbhai Patolia. Pre-issue, they held 100% of shares, which decreased to 73.60% post the issue.

Company Profile:

Incorporated in 2004, Paragon Fine And Speciality Chemicals are engaged in the business of custom synthesis and manufacturing of speciality chemical intermediates involving complex and differentiated chemistry. The company manufactures Pharma Intermediates, AGRO intermediates, Cosmetics Intermediates, Pigment Intermediates, and Dye Intermediates for a diverse Indian and global customer base.
The company's manufacturing unit, covering approximately 7000 square meters in Viramgam District, Ahmedabad, Gujarat, is equipped with high-end reactors for research and development of new products. Their R&D team, consisting of 14 technocrats, has successfully developed around 140 products as of March 31, 2023.

Competitive Strengths:

The net proceeds from the issue are allocated towards:
1. Wide range of customizable products
2. Focus on R&D to leverage complex chemistry and technology.
3. Long-term relationships with customers across different nationalities.
4. In-house manufacturing unit with equipped technologies and processes.
5. Experienced Promoters and Senior Management.

Financial Performance Overview:

As of June 30, 2023, Paragon Fine And Speciality Chemicals reported the following financials:

• - Assets: ₹7,412.19 Lakhs
• - Revenue: ₹2,900.43 Lakhs
• - Profit After Tax: ₹362.16 Lakhs
• - Net Worth: ₹2,595.67 Lakhs
• - Reserves and Surplus: ₹2,235.67 Lakhs
• - Total Borrowing: ₹2,709.67 Lakhs

Key Performance Indicators:

• - P/E (x): 14.56
• - Post P/E (x): 13.51
• - Market Cap: ₹195.66 Crores
• - ROE: 56.89%
• - ROCE: 38.86%
• - EPS (Rs): 6.87
• - RoNW: 44.29

Objects of the Issue:

The company intends to utilize the proceeds of the issue for the following purposes:
1. Funding capital expenditure towards civil construction work in the existing premises of the factory.
2. Funding capital expenditure towards civil construction work in Plot No 10/A, situated at Survey No. 1359, 1360 Village-Viramgam Taluka- Viramgam, District-Ahmedabad-382150, Gujarat.
3. Repayment of certain outstanding borrowings.
4. Funding Capital Expenditure towards the installation of additional plant and machinery for Expansion.
5. Funding to meet working capital requirements.
6. General Corporate Purpose.

Expert Analysis:

The issue appears fully priced, and well-informed investors may consider moderate funds for medium to long-term rewards.

IPO Subscription Status:

As of October 30, 2023, the Paragon Fine And Speciality Chemicals IPO were subscribed 205.74 times. The retail category saw a subscription of 185.28 times, the QIB category 81.38 times, and the NII category 419.46 times. The total number of applications stood at 265,138, reflecting a subscription of 185.28 times.

Note: All financial figures are in INR (Indian Rupees), and market-related data is as of December 20, 2023.

Read More IPO related blogs - KK Shah Hospitals IPO