One new interesting IPO is coming in Indian Stock market which is of Sigachi Industries. This is a monopoly type of company and they deliver such products which is in very demand. So this article will be very interesting and informative.
Topics
At first we will discuss about the basic information of the company, then we will discuss about the financial ratio. We will also discuss IPO dates and lastly we will give our opinion if we should invest in this company or not.
Objective
Sigachi Industries was founded in 1989 by Rabindra Prasad Sinha. This company is engaged mainly in manufacturing of microcrystalline cellulose (MCC). It is usually used in pharmaceutical industry. Cosmetic and food industry also used this MCC in their products.
They are not restricted to produce only one type of MCC rather than they are involved in manufacturing of a range of MCC as per their customer demands.
They have their factory in Gujarat and Hyderabad. Their R&D generally happens in house. They have many quality certificates from national and international reputed organization. Their motive of IPO to raise money to expand their factory capacity to produce more MCC for the market.
Positive sides
They are the leading company of India for producing MCC. They are also very old, experienced and reputed in market. A wide range of MCC products are available to cater diverse industry usage. They have good bond with their customer for many years now. Their factories are strategically located so that they can deliver their products easily. It also get various govt incentives.
Negative Sides
The raw materials are imported from various other countries. So if any tension occurs with those countries, the supply will get hampered. As MCC was used in sensitive segments like pharmaceutical or food industry, there are high rules and regulation. So supply of each and every raw material is very important for the company.
Financials
The financials of the company is getting better every year. It has now 1500 crore rupees assets compared to 900 crore rupees assets in 2019. The return on investment is also fantastic. It was around 51 percent last year.
The PE ratio is 14, by which we can say that company is not overvalued. If we compare this with any other IPO s which was recently came in market, we will see this company has better fundamentals than most other companies.
Important Dates
This IPO will be open today on 1st November. It will be closed on 3rd November. So if you want to apply you should do before 2 pm on 3rd November. This company will be listed on 15th November.
Application size will be of 90 shares in a lot which will cost around 15000 rs. The IPO will be of 120 crores in which is totally fresh issue. It is also a good sign.
Our opinion
This company is already getting 25 percent in grey market premium. This company is good, valuation is also decent, financials are also in good, so you can invest in this company after reading the prospectus of the company.