🌟 IPO Review 🌟
🌟 Aether Industries IPO 🌟
📊IPO Details:
Dates: 24th May- 26th May 2022
Price Band: Rs.610-642 per share
Lot Size: 23 Shares
Face value: Rs.10 per share
Issue Size: 808.04 Cr (Fresh Issue: 627 Cr, OFS: 181 Cr)
Subscription status: 0.65 times (As of 26.05.2022 11.40 AM)
📊Company details:
❧ Aether Industries is Surat based advanced and specialty chemical manufacturer started in 2013.
❧ The first phase of development was started in 2017 with revenue from operations starting from the second phase in 2018.
❧ It is one of the fastest-growing companies in India with a CAGR of 60% between the fiscal year 2018 to 2021.📈
❧ The company operates mostly in the B2B segment and has more than 25 products in the portfolio. It is the sole manufacturer in India for a few chemical products.📈
❧ The company exports its products to 18 Countries.
❧ They have started construction of their 3rd plant and looking for land acquisition for their 4th plant.
❧ They serve customers like Adama Group (Israel), Altana AG (Germany), Aramco Performace Materials LLC, Miliken& Co. etc📈
❧ The company has 31 international customers and 154 domestic customers.
📊Company's Operating Segments and revenue distribution:
1) Large scale manufacturing of intermediate and specialty chemicals which contributes to 73.18% of its revenue.
2) Contract Research and Manufacturing Services (CRAMS) contributes 7.44% of its revenue.
3) Exclusive Contract Manufacturing contributes to 19.38% of its revenue.
📊Objectives of the issue:
1) Funding Capital Expenditure requirements.📈
2) Repayment of debt of Rs.137.9 Cr
3) Funding working capital requirements of Rs.165 Cr
4) For some general corporate purposes.
📊Financials:
❧ The sales growth CAGR of the company was 49.5% from 2019 to 2021.
❧The company earned Rs.251.6 Cr from exports out of the total revenue of Rs.453 Cr.📈
❧ The average selling price of the company is high which is at Rs.1440 /kg in FY 21.
❧ The company's total revenue for the previous year was Rs.4493 million while PAT was Rs.829.06 million.📈
❧ EPS of the company is at Rs.7.36 with a PE of 116.52 compared to the industry PE of 83.35.📈
❧ Operating cash flows were Rs.23.20 Cr in the previous financial year.
EBITDA margins were 23.5% from FY 19 to 21.
❧ Total assets stood at Rs.709.56 Cr in 9 month ended the Financial year 2022.
Net Profit Margins are at 15.69%, ROE at 40.79, and debt to equity at 0.97.
🟢 Pros:
❧ Good Customer base with established international customers
❧ High barrier to entry in the segment
❧ The company has customers from various sectors.
❧ Complex manufacturing
❧ Leaders in manufacturing for a few of the chemical products.
❧ High Selling price
🔴 Cons:
❧ The company earned 79.83% of its revenue from the top 20 customers hence there is a customer concentration risk.📈
❧There are no long-term agreements for long term because which they might face hits due to volatility in raw material prices.
❧ Disclaimer: The information mentioned above is only for educational purposes. Kindly contact your financial advisor before trading/investing 💰
Please post your views/queries in the comments below. 👇
