Crizac Limited’s ₹860 crore initial public offering (IPO) has seen overwhelming investor demand, with the issue getting subscribed 59.82 times on the final day of bidding. The stellar subscription indicates high market confidence in the company’s business model, sectoral positioning, and future growth strategy.
IPO Subscription Snapshot
| Category | Subscription (times) |
|---|---|
| Qualified Institutional Buyers (QIBs) | 125.64 |
| Non-Institutional Investors (NIIs) | 93.12 |
| Retail Individual Investors (RIIs) | 23.75 |
| Employees | 4.19 |
| Overall | 59.82 |
The Qualified Institutional Buyers (QIB) portion was the strongest, indicating significant participation from mutual funds, insurance firms, sovereign wealth funds, and foreign institutional investors.
Crizac Limited: Business Overview
Crizac Limited is engaged in high-value specialty chemicals and performance materials, catering to:
- Agrochemicals
- Pharmaceuticals
- Personal care and hygiene
- Textile and industrial coatings
The company exports over 50% of its products to Europe, North America, and Southeast Asia, with a customer base including global blue-chip companies.
| Business Segment | Contribution to FY24 Revenue (%) |
|---|---|
| Agrochemicals | 34 |
| Pharmaceuticals | 27 |
| Personal Care | 19 |
| Industrial & Textile | 20 |
IPO Details
| Particulars | Details |
|---|---|
| Issue Size | ₹860 crore |
| Fresh Issue | ₹600 crore |
| Offer For Sale (OFS) | ₹260 crore |
| Price Band | ₹435-₹460 per share |
| Lot Size | 32 shares |
| Listing Exchanges | NSE, BSE |
| Registrar | KFin Technologies |
The fresh issue proceeds will be utilised for:
- Setting up a greenfield manufacturing plant in Gujarat.
- Working capital augmentation.
- Debt repayment and general corporate purposes.
Market Sentiment And GMP Trends
Grey market premium (GMP) trends indicated a premium of ₹170-₹180 per share over the issue price, signalling a potential 35-40% listing gain if market sentiment remains positive on debut.
| Date | GMP (₹) | Expected Listing Price (₹) |
|---|---|---|
| Day 1 | 110 | 570 |
| Day 2 | 145 | 605 |
| Day 3 | 170 | 630 |
| Final Day | 180 | 640 |
Management Commentary
Crizac’s Managing Director, Rohit Vora, stated:
“We are humbled by the overwhelming investor support. The IPO proceeds will accelerate our expansion into high-margin chemistries and backward integration to enhance profitability.”
Analyst Views
- Prakash Diwan, Capital Market Expert:
“Crizac combines strong export orientation with product diversification across high-growth specialty segments. Its balance sheet will improve post-IPO, aiding long-term expansion.” - Meera Gupta, Research Head, Axis Securities:
“While valuations are slightly above mid-cap chemical peers, its growth trajectory, global linkages, and planned capex justify the premium.”
Industry Outlook
The Indian specialty chemicals market is expected to grow at a CAGR of 12-13%, driven by:
- China+1 strategy adopted by global buyers to diversify sourcing.
- Favourable domestic policy support for chemicals manufacturing.
- Rising demand in personal care, agrochemicals, and pharma intermediates.
Financial Performance
| Particulars | FY22 | FY23 | FY24 |
|---|---|---|---|
| Revenue (₹ crore) | 715 | 863 | 1052 |
| EBITDA (₹ crore) | 113 | 146 | 184 |
| EBITDA Margin (%) | 15.8 | 16.9 | 17.5 |
| Net Profit (₹ crore) | 67 | 84 | 108 |
The company’s consistent improvement in margins reflects better product mix optimisation and operating leverage benefits.
Peer Comparison
| Company | Revenue (FY24 ₹ crore) | EBITDA Margin (%) | P/E Ratio |
|---|---|---|---|
| Crizac | 1052 | 17.5 | 32 |
| Navin Fluorine | 1700 | 21.4 | 48 |
| Aarti Industries | 7600 | 18.9 | 38 |
| Vinati Organics | 1500 | 27.2 | 42 |
Crizac’s valuation is in line with mid-to-large specialty chemical players, with room for upside as it enters niche chemistries.
Future Growth Strategy
Crizac plans to:
- Commission its new plant by Q4 FY26 with 1.5x existing capacity.
- Enter performance surfactants and fluorine-based intermediates.
- Expand R&D investment for new molecule development.
- Explore acquisition opportunities in the European market for deeper customer integration.
Risks To Watch
- Raw material price volatility, particularly crude derivatives.
- Currency fluctuations due to high export exposure.
- Regulatory compliance risks in international markets.
Conclusion
Crizac Limited’s blockbuster IPO subscription underlines investor appetite for specialty chemicals players with export orientation, margin resilience, and growth visibility. Its strong order pipeline, capacity expansion plans, and diversified portfolio position it favourably for sustainable earnings growth.
Disclaimer: This news report is for informational purposes only and does not constitute investment advice. Readers are advised to consult SEBI-registered financial advisors, merchant bankers, and official prospectus documents before making any investment decisions based on this report. The publication is not responsible for any investment decisions taken based on the information presented.
