Patel Chem Specialities
- Patel Chem Specialities is coming out with an initial public offering (IPO) of 70,00,000 equity shares in a price band Rs 82-84 per equity share.
- The issue will open on July 25, 2025 and will close on July 29, 2025.
- The shares will be listed on SME Platform of BSE.
- The face value of the share is Rs 10 and is priced 8.20 times of its face value on the lower side and 8.40 times on the higher side.
- Book running lead managers to the issue are Cumulative Capital and Unistone Capital.
- Compliance Officer for the issue is Sonalkumari Yadav.
Profile of the company
Patel Chem Specialities operates in the field of specialty chemicals, particularly focusing on the production of cellulose-based excipients. It manufactures a diverse range of products that are critical to various industries, including pharmaceuticals, food & beverages, cosmetics, and numerous industrial applications. These chemicals are fundamental in the formulation of essential products such as tablets, food additives, personal care items, and industrial formulations. Its products play vital roles as binders, disintegrants, thickeners, stabilizers, and gelling agents, each serving a specialized function across multiple sectors.
Since inception, the company manufactures Carboxymethyl Cellulose Sodium (Sodium CMC), Microcrystalline Cellulose (MCC), Carboxymethyl Cellulose Calcium (CMC Calcium), Croscarmellose Sodium (CCS), Sodium Starch Glycollate (SSG), and Sodium Monochloro Acetate (SMCA). With a commitment to quality and innovation, it has successfully established a strong global presence, exporting its products to over 15 countries, including the USA, Germany, UK, Japan, China, Australia, and many more. Its expertise in producing high-quality excipients has enabled it to carve out a niche in the cellulose-based chemicals market, driven by its adherence to international quality standards such as US-DMF, GMP, ISO 9001:2015 etc.
The company offers a diverse range of cellulose-based chemicals, each serving specialized functions across various industries. Sodium CMC, a versatile product, is used as a thickener, binder, and gelling agent in pharmaceuticals, food & beverages, cosmetics, and industrial applications such as oil drilling, under the brand “Rheollose”. Microcrystalline Cellulose (MCC) is valued in pharmaceuticals and food & beverages as a bulking agent, texturizer, and binder, with products branded as “Hindcel”. Sodium Starch Glycollate (SSG) serves as a disintegrant in tablets, available in corn (BlowTab C) and potato-based (BlowTab P) variants. Croscarmellose Sodium and Calcium CMC, powerful super disintegrants, are marketed as “Disolwell” and “Swellcal”, respectively. Additionally, Sodium Monochloro Acetate (SMCA) is a key raw material for its products and has applications in drug production and nutritional products.
Proceed is being used for:
- Funding capital expenditure requirement of the company towards; setting up plant at Indrad, Mahesana for manufacturing Croscarmellose Sodium (CCS), Sodium Starch Glycolate (SSG) - Corn Starch Base & Potato Starch Base and Calcium Carboxymethylcellulose (CMC)
- General corporate purposes
Industry Overview
Indian chemical and petrochemical sector is one of the crucial sectors, contributing positively to economic growth and regional development, as it is the mainstay of industrial and agriculture development in the country, providing building blocks for downstream and upstream related industries like textiles, paper, fertilizers, pharmaceuticals and others. Besides, it occupies a central position in meeting the basic needs and improving the standard of living of the people. The industry is a knowledge intensive as well as capital-intensive industry and occupies a pivotal position in meeting basic needs and improving quality of life. It is one of the largest sectors in India, encompassing a diverse range of chemicals, petrochemicals, specialty chemicals, agrochemicals, and more. The sector provides millions of jobs directly and indirectly, with large employment in production, R&D, logistics, and sales, in both urban and rural areas.
The future outlook for Indian chemical and petrochemical sector is bright, supported by strategic investments, a focus on sustainability, and strong domestic demand. Make in India and Aatmanirbhar Bharat initiatives are likely to boost domestic production and also increase the demand for chemicals and petrochemicals. Such significant measures are expected to transform India into a global manufacturing hub for chemicals and petrochemicals, and help realize the vision of the country becoming a $5 trillion dollar economy. Further, demographic dividends, an export demand and enabling government initiatives are the key growth drivers for the industry. Government initiatives to curb low-cost and substandard imports will also act as growth enabler for the industry. The availability of a competent workforce at a competitive cost will contribute to the reduction in overall expenses and increasing profit margins.
By embracing innovation, leveraging renewable resources, and advancing green chemistry, the industry will not only see improvement in their profitability but will also contribute to national economic growth, ensuring a prosperous and sustainable future for generations to come. The domestic market is becoming more dependent on imports to meet demand, which has been seen with the imports exceeding the exports, pointing to a trade deficit in chemicals and petrochemicals. This gives domestic manufactures opportunity to boost their production to meet higher consumption needs in the country. However, the risks such as trade tensions and geopolitical uncertainties may hamper growth of the sector, with firms heavily reliant on exports could face heightened profitability pressure, amid the imposition of high reciprocal tariffs by the US.
Pros and strengths
Strong product portfolio: It manufactures a range of products in the pharmaceutical excipient segment. Its product portfolio presently comprises 5 excipients (SSG, CCS, Calcium CMC, Sodium CMC and MCC) and 1 fine chemical (SMCA) which are marketed domestically and exported. It supplies its products to more than 15 countries, including both direct and indirect exports. It continuously focuses on developing new products within its existing segments, including niche products developed with specific applications or taking customer specifications in view.
Strong global presence: The company is very aggressive in promoting its range of products in the domestic & international market through participating in frequent visits to customers, marketing & advertising at relevant platforms. The company shall focus on expanding its geographical reach in maximum countries by exploring unexplored potential & assured promotional venues. With the help of its quality products, it has been able to create a long-standing market presence in India and internationally. It caters to various end users, merchants and exporters. It exports its products to over 15 countries, including USA, Germany, UK, Japan, China, Australia, and many more.
Continuous innovation and quality consistency: It is a research-driven company, dedicated to innovation and excellence in every aspect of its operations. Its well-established R&D facility at the Vatva unit, equipped with advanced chemical and analytical laboratories, focuses on creating processes that improve efficiency and reduce costs. Product and process innovations are essential for its growth and actively engage with customers to understand their unique needs. This collaborative approach allows it to deliver tailored solutions in a timely and effective manner, strengthening its role as a trusted partner. Additionally, the company aims to continually enhance its formulation and application expertise, driven by its technical R&D team.
Risks and concerns
Maximum revenue comes from sales in few states: The company’s domestic sales are dependent on the top 3 states including Gujarat, Maharashtra, West Bengal. It generated almost i.e. 65.97%, 60.74% and 64.72% of the total domestic sales for the financial years ended 2025, 2024 and 2023 respectively. Such concentration of revenue in above states may have an adverse effect. Further, drastic change in taxes and other levies imposed by state government as well as other financial policies and regulations, political and deregulation policies, if changed, could harm business and economic conditions. However, the composition and revenue generated from various states might change as it continues to add new customers in the different parts of India.
Significant purchase depends on few states and single country: The company’s domestic purchases are dependent on the top 3 states including Gujarat, Maharashtra, Delhi and all of its imports are done from China. The company purchased almost i.e. 65.42% and 69.58%, 67.11% of the total purchases from domestic market for the financial years ended 2025, 2024 and 2023 respectively and imported almost i.e. 34.58%, 30.42% and 32.89% of total purchases for the financial years ended 2025, 2024, and 2023 respectively. From the above domestic purchase, 94.34%, 95.43% and 92.33% were purchased from Gujarat, Maharashtra and Delhi for FY 2025, FY 2024 and FY 2023 respectively. Such concentration of purchases in above states and China may have an adverse impact on its business. Further, drastic change in taxes and other levies imposed by state government and government of China as well as other financial policies and regulations, political and deregulation policies, if changed, could harm business and economic conditions.
Business is subject to extensive regulation: The company operates in a highly regulated industry and its operations are subject to extensive regulation in each market in which it does business. Its business operations require it to comply or obtain and renew certain approvals, licenses, registrations and permits, some of which may expire and for which it may have to make an application for obtaining the approval or its renewal. It will be applying for certain approvals relating to its business. Furthermore, in certain markets where it markets and sells its products, regulatory authorities must grant approval for its manufacturing facilities and products before they can be marketed, regardless of whether they have already received approval in India or elsewhere. A majority of these approvals require renewal from time to time. There can be delays in obtaining required clearances from regulatory authorities after applications are filed. This could materially and adversely affect its business, financial condition, and results of operations.
Outlook
Patel Chem Specialities is engaged in the manufacturing and exporting pharmaceutical excipients and specialty chemicals. The company’s manufacturing facility covers 7,000 square yards, with a capacity of over 7,200 MT annually for pharmaceutical excipients, featuring departments for storage, production, R&D, quality control, packaging, and warehousing. The company has expanded globally, serving East Asia, Europe, the Middle East, North America, and Southeast Asia, delivering high-quality products that meet international standards to lead the chemical industry. On the concern side, majority of its domestic sales for the last 3 Financial Years is dependent on few states. Any loss of business from any of these states may adversely affect its revenues and profitability. Moreover, majority of its domestic purchases and imports for the last 3 Financial Years is dependent on few states and single country. Any loss of business from any of these states and country may adversely affect its ability to procure its raw materials in time to meet its customers’ needs.
The company is coming out with a maiden IPO of 70,00,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 82-84 per equity share. The aggregate size of the offer is around Rs 57.40 crore to Rs 58.80 crore based on lower and upper price band respectively. On performance front, the company has reported a rise of 27.61% in its total revenue at Rs 10,555.19 lakh in FY25 as compared to Rs 8,271.61 lakh in FY24. The increase in operational revenue can be attributed to the better capacity utilization as a result of the additional demand for its products. Moreover, the company’s net profit surged 38.00% to Rs 1,056.54 lakh in FY25 as compared to Rs 765.62 lakh in FY24.
The company has built a presence in the specialty chemicals industry by consistently delivering high-quality products that meet international standards. It is exporting to more than 15 countries including the USA, Germany, UK, Japan, China, Australia, and many more which contribute significantly to its export sales. To further expand its global reach, it is focusing on building stronger distribution networks, advancing research and development to address diverse market needs, and exploring opportunities in new and emerging regions. These efforts are aimed at strengthening its international presence and driving growth in key global markets.
