Gwalior Chemical Industries Ltd IPO (Gwalior Chemical IPO) Detail

What is the listing date for Gwalior Chemcials

Friends GCIL's IPO allocation has been finalized –
      for 525 applications – 81 allotments
      for 1125 applications – 174 allotments

GCIL's exports have grown from Rs.4.90 cr. in FY03 to Rs.21.18 cr. in FY05 and Rs.52.65 cr. in FY06. To strengthen its exports, the company has incorporated a subsidiary in Belgium to provide marketing support and storage facilities.

GCIL's sales was Rs.170.63 cr. (Rs.136 cr.) and PAT of Rs.15.59 (Rs.13.02 cr.) for FY06 compared to a net sales and
adjusted profit after tax of Rs.136 cr.

Strengths of Gwalior Chemical IPO:

1. A de-risked business model with broad customer base.

2. No new plants are coming up in the west to manufacture chlorinated compounds, which is expected to boost the outsourcing opportunities for Indian players. GCIL is expected to benefit by supplying high quality molecules at competitive costs.

3. With the expansion into high margin products, pursuing forward integration, and setting up a captive power plant, OPM is expected to move up.

4. Expected to benefit from in-house R&D team, which has helped to reengineer processes and cut costs.


Weaknesses of Gwalior Chemical IPO:

1. Important raw materials – toluene and chlorine – have witnessed wide fluctuations in pricing in the past and may continue fluctuating in the future.

2. Since the pricing of the products is based on import parity, any reduction in customs duty will have an adverse impact on margin.

3. Largely dependent on single suppliers for its key raw materials such as Reliance Industries for supply of toluene and Grasim Industries for chlorine at the Nagda facility.

What do u guys think?
Post if you know more strengths and weaknesses…

Ragu