Clean Science IPO

IPO Details:

Price Band: 880-900

Cutoff Price: 900

About Company:

Clean Energy manufacture functionally critical specialty chemicals such as Performance Chemicals (i.e. MEHQ, BHA and AP), Pharmaceutical Intermediates (i.e. Guaiacol and DCC), and FMCG Chemicals (i.e. 4-MAP and Anisole). Their products are used as polymerization inhibitors, intermediates for agrochemicals and pharmaceuticals, anti-oxidants, UV blockers, and anti-retroviral reagents, which are functionally critical in a wide range of industries, including in the manufacture of paints and inks, agro-chemicals, pharmaceuticals, flavours and fragrance, food and animal nutrition (feed), and personal care (cosmetics) products. Company was established on ‘green’ or eco-friendly manufacturing processes led by differentiated catalytic technologies.

Competitive Strengths:

1. Track record of strategic process innovation through consistent R&D initiatives;

2. Among the largest producers globally of functionally critical specialty chemicals used across various industries and geographies resulting in a de-risked business model;

3. Experienced Promoters and senior management with extensive domain knowledge;

4. Strong and long-standing relationships with key customers;

5. Automated manufacturing facilities with proven design and commercialization capabilities and strong focus on EHS;

6. Strong and consistent financial performance in the last three Fiscals.

Strategies:

1. Leverage leadership position in the specialty chemicals industry to capitalize on industry opportunities;

2. Leverage R&D capabilities and understanding of catalysis to continue process re-engineering, further enhancing our product portfolio;

3. Expand manufacturing capacities of existing products and set up additional capacities for new products;

4. Continue to strengthen presence in India and expand our sales and distribution network in international markets.

Financial Performance:

Company revenue, net profit and EPS are positive and increasing year on year. With current EPS of 18.7 for financial year 2021, PE of the Clean Science is 48.1.

Objects of the Issue:

The Net Proceeds from the Issue are proposed to be utilised in the following manner:

1. Offer for Sale

Competitors Comparison:

Clean Energy IPO seems to be undervalued based on the P/E ratio but slightly overvalued based on price to book value ratio. If I remove Camlin Fine from PE average calculation, then average PE comes out to be 66.7. This is again more than Clean Science PE.

Grey Market Premium:

Our view: GMP of the stock is decent and also the stock is fairly valued. We can expect this IPO to list at premium and hence I would be applying for this IPO.

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Disclaimer: Views are shared for an educational purpose. Please consult your financial advisor or planner before taking any action based on the views or facts shared on this blog.

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