- Our view
- May Subscribe
- Market cap then
- ~INR 167.78 Cr.
- Price band
- INR 93 to 98 per share
Neochem Bio Solutions manufactures specialty performance chemicals for textiles, home and personal care, cleaning, paints and coatings, and dyes. We recommend May Subscribe to its IPO, priced at INR 93 to 98 per share. Its integrated manufacturing and in-house R&D are strengths, balanced by working-capital needs, related-party sales and debt.
About Neochem Bio Solutions
Incorporated in 2017, Neochem Bio Solutions manufactures specialty performance chemicals for textile, home and personal care, institutional and industrial cleaning, paint and coatings, and dye industries. Its ISO certified manufacturing facility in Ahmedabad, Gujarat has installed capacity of 22,000 MTPA, alongside warehousing capacity for 1,350 MT of raw materials and finished goods. It operates a B2B model through more than 50 pan India authorized distributors and reselling agents, serving domestic and export markets. Its products span polymers, surfactants, silicones, and esters and biobased sustainable solutions.
Neochem Bio Solutions IPO Details
| Particulars | Details |
|---|---|
| Price Band (INR) | 93 to 98 |
| Face Value (INR) | 10 |
| Implied M.Cap (INR Cr.) | 167.78 |
| Exchange | NSE SME |
| Min. Lot Size (Retail | HNI) | 2,400 | 3,600 |
| Issue Opens on | 02-Dec’25 |
| Issue Closes on | 04-Dec’25 |
| Listing Date | 09-Dec’25 |
| No. of shares pre-issue (#) | 1,25,31,953 |
| Fresh Issue of Shares (#) | 45,88,800 |
| Offer for Sale (#) | - |
| No. of shares post-issue (#) | 1,71,20,753 |
| Funds Mobilized (INR Cr.) – Fresh Issue of Shares | 44.97 |
| Funds Mobilized (INR Cr.) – Offer for Sale | 0.0 |
| QIB shares offered | <=50% |
| Retail shares offered | >=35% |
| NII (HNI) shares offered | >=15% |
| Registrar | MUFG Intime India |
| Book Running Lead Managers | Vivro Financial |
Use of IPO Proceeds
- Working capital: Funding long-term working capital requirements: INR 23.90 Cr.
- Borrowings: Repayment of borrowings: INR 10.00 Cr.
- General corporate purposes: The amount is shown as [●] in the issue summary.
Strengths
- Integrated manufacturing and in-house R&D: The company can produce key intermediates in-house and develop proprietary formulations. Its portfolio comprises 350 customized formulations for different customer requirements, and it has 40 registered trademarks.
- Flexible production capability: The partially automated facility can produce small to medium batches and handle liquid and powder-based chemistries.
- Established distribution network: Products are sold through more than 50 pan India authorized distributors and reselling agents. Domestic sales covered 227 customers in FY25 and 228 in H1FY26.
- Experienced promoter: Promoter and Managing Director Mr. Swapnil Rameshbhai Makati has over 20 years of experience in the chemicals industry.
Business Mix and Capacity
Textiles remained the largest end-customer industry, although its share of revenue declined from 95.9% in FY23 to 77.0% in H1FY26. Over the same periods, HPCI increased from 2.2% to 14.2%, and Paint & Coatings from 1.5% to 7.9%. In H1FY26, surfactants contributed 37.4% of product mix and polymers 35.5%; esters contributed 18.4% and silicones 8.7%.
Domestic sales accounted for 94.3% of revenue in H1FY26, with exports at 5.7%. Gujarat represented 55.1% of revenue in that period. In July 2024, the company entered a distribution agreement with a Netherlands-based manufacturer of fluorine-free bio-based functional water and stain repellents; it holds exclusive distribution rights in India, Bangladesh and Sri Lanka for these technologies.
| Particulars | FY23 | FY24 | FY25 | H1FY26 |
|---|---|---|---|---|
| Installed Capacity (MTPA) | 22,000 | 22,000 | 22,000 | 22,000 |
| Utilized Capacity (MTPA) | 5,414 | 7,694 | 9,200 | 5,002 |
| % Utilized | 24.6% | 35.0% | 41.8% | 22.7% |
| Sales Realization (INR / kg) | 89.0 | 79.5 | 91.5 | 91.6 |
| EBITDA (INR / kg) | 7.8 | 7.8 | 14.3 | 17.2 |
| PAT (INR / kg) | 2.0 | 2.3 | 8.4 | 11.0 |
H1FY26 utilization is not annualized.
Neochem Bio Solutions Key Financials
| Particulars (INR Cr.) | FY23 | FY24 | FY25 | H1FY26 |
|---|---|---|---|---|
| Revenue (excl. other inc.) | 48.2 | 61.2 | 84.2 | 45.8 |
| Growth Rate Y-o-Y % | 26.9% | 37.6% | ||
| EBITDA (excl. other inc.) | 4.2 | 6.0 | 13.1 | 8.6 |
| PAT | 1.1 | 1.8 | 7.8 | 5.5 |
| Gross Margin % | 31.8% | 34.3% | 32.3% | 34.4% |
| EBITDA % (excl. other inc.) | 8.8% | 9.8% | 15.6% | 18.7% |
| PAT % | 2.2% | 2.9% | 9.0% | 11.6% |
| Debt (Short+Long) | 26.2 | 33.3 | 35.6 | 38.5 |
| Equity | 8.1 | 12.0 | 19.8 | 32.2 |
| Debt/Equity | 3.3x | 2.8x | 1.8x | 1.2x |
| NWC | 16 | 21 | 32 | 47 |
| NWC (days) | 120 | 127 | 140 | 187 |
| ROE % | 18.07% | 17.97% | 48.82% | 21.10%^ |
| ROCE % | 17.46% | 21.46% | 41.67% | 22.84%^ |
| CFO / EBITDA % | (17.5%) | 32.7% | 19.8% | (89.6%) |
NWC includes Inventory, Receivables & Payables; & NWC days is computed as % of rev. ^Not annualised.
Revenue and EBITDA increased between FY23 and FY25. In H1FY26, EBITDA margin was 18.7% and PAT margin was 11.6%; the reported H1FY26 CFO / EBITDA was (89.6%).
Management
- Swapnil Rameshbhai Makati: Promoter and Managing Director, with over 20 years of experience in manufacturing and trading of specialty chemicals performance industry.
- Hemangini Swapnil Dathia: Whole Time Director, associated with the company since inception and responsible for HR. She has a Diploma in Chemical Engineering from Nirma Institute of Diploma Studies, completed in 2002, and is the promoter’s wife.
Peer Comparison
The RHP names Rossari Biotech Ltd. and Indian Emulsifiers Ltd. as peers. Neochem Bio Solutions’ FY25 EBITDA margin was 15.6% and debt/equity was 1.8x, compared with Rossari Biotech’s 12.7% and 0.18x, and Indian Emulsifiers’ 19.4% and 0.31x, respectively. The peer table shows Neochem’s P/E at 21.6x (FY25 PAT) and 15.3x (annualized H1FY26 PAT); Rossari Biotech was at 24.4x (TTM) and Indian Emulsifiers at 11.6x (TTM).
IPO Valuation and Our View
The issue is valued at P/E ratios of 21.6x based on FY25 PAT and 15.3x based on annualized H1FY26 PAT. The note weighs the integrated facility, in-house R&D, distribution network and experienced promoter against working-capital intensity, related-party sales and debt. Our recommendation is May Subscribe.
Key Risks
- Working-capital intensity: Inventory is held to support uninterrupted production across 350+ customized formulations, while growth and geographic diversification may increase receivables. NWC days were 187 in H1FY26.
- Related-party sales: ~43% of FY25 sales (~45.5% for FY24) were to Neochem Specialties, a reselling agent that is a sole proprietorship owned and controlled by promoter Mr. Swapnil Makati.
- Debt: Debt/equity stood at 1.2x as on Sep’25. The report expects this to come down from IPO proceeds.
- Revenue projections: The RHP projects FY26 and FY27 revenue of INR 121 Cr. and INR 167 Cr., respectively; the report notes these were computed using FY26 and FY27 trade receivables projections as per RHP.
Our View
Neochem Bio Solutions combines in-house manufacturing and R&D with a broad customized product range and established distribution. The business also has high working-capital requirements, substantial related-party sales and debt exposure. The report’s IPO recommendation is May Subscribe.
Standard disclosures
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Rating rationale
Minerva Capital Research Solutions endeavors to provide objective opinions and recommendations. Ratings are assigned to stocks according to their fair value vs current market price and then categorizes them as Buy, Hold, Reduce, Sell. The performance horizon is one year unless specified and fair value is defined as analyst’s valuation for a stock.
- Buy:> 15%
- Hold: -5% to 15%
- Reduce: -15% to -5%
- Sell: <-15%