IPO Review - Tatva Chintan Pharma Chem Ltd - ICICI Direct

Incorporated in 1996, Tatva Chintan is a specialty chemicals manufacturing company engaged in the manufacture of a diverse portfolio of structure directing agents (SDAs), phase transfer catalysts (PTCs), electrolyte salts for super capacitor batteries and pharmaceutical and agrochemical intermediates and other specialty chemicals (PASC). Apart from customers in India, the company also exports products to over 25 countries, including the US, China, Germany, Japan, South Africa, and the UK. As on March 31, 2021, it manufactured over 154 products.

Investment Rationale

Expand existing product portfolio

The company intends to further diversify into products with prospects for increased growth and profitability. Tatva Chintan plans to continue to increase offerings in current business segments as well as diversify into new products by tapping into segments, which in the view of the management, have attractive growth prospects. For instance, it intends to increase focus on products manufactured using continuous flow chemistry processes as well as electrolysis processes, as these will be more sustainable and are good value propositions.

Further developing R&D capabilities bodes well for future

The company has consistently invested in R&D capabilities and technologies and has successfully implemented most of them based on market/customer demand at manufacturing facilities over the years. In this regard, of the 2,787.00 square metre of land leased to the company at Vadodara, it now intends to expand R&D facility at Vadodara and utilise 1,887.00 square metre of the available land for the same. It intends to identify and adopt new-age technologies for process and product development to improve productivity, quality and cost effectiveness and help make products eco-friendlier. It is also aiming to develop technologies to produce conventional products using new-age technologies such as continuous flow chemistry and electrolysis processes. This will enable it to achieve better productivity, quality and cost effectiveness. In addition, it intends to further improve manufacturing processes to make it more environment friendly and sustainable.

For details, click on the link below: Link to the report

Source : Equity Bulls

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