Six IPOs have announced dates with price ranges, and six more are expected to launch by the end of December 2023. Gandar Oil Refinery IPO is scheduled to launch on November 22, 2023. Gandar Petroleum Ltd. is a prominent manufacturer. White Oil’s products serve consumer and healthcare end industries.Should you invest in Gandar Oil Refinery IPO? In this article, we will discuss in detail about IPO, positive and negative factors and give a complete review.?
About Gandar Petroleum Refining India Ltd.
Gandhar Oil Limited is a prominent manufacturer of white oils catering to the consumer and healthcare industries.
The company offers a wide range of over 350 products divided into three main categories:
1) Personal Care, Healthcare Performance Oil (PHPO)
2) Lubricant
3) Process oil and insulation oil
The company’s products serve as critical raw materials for various end products in sectors such as consumer goods, healthcare, automotive, industrial, power, tires, rubber, etc. and are used by leading Indian and global companies. . The company has served over 100 countries around the world. He serves over 3,500 clients including companies such as P&G, Unilever, Marico, Dabur, Encube, Patanjarya Ayurveda, Bajaj Consumer Care, Emami, Amrutanjan Healthcare.
Gandar Oil Refinery IPO – Key details
IPO start date | November 22, 2023 |
IPO deadline | November 24, 2023 |
IPO listing date | December 5, 2023 |
Type of problem | Book Built Issue IPO |
face value | 2 rupees per share |
IPO price range | 160 to 169 rupees per share |
lot size | 88 shares |
Exhibition location | BSE and NSE |
Total issue size | Rs. 500.69 billion |
Latest issue | Rs. 320 million |
OFS | Rs. 198.69 billion |
company finances
Fiscal year end/period end (amount in billions) | ||||
Period ends | March 31, 2021 | March 31, 22 | March 31, 23 | September 30, 23 |
---|---|---|---|---|
assets | 1,100.90 | 1,318.20 | 1,613.40 | 1,795.57 |
revenue | 2,242.59 | 3,568.96 | 4,101.79 | 1,071.51 |
Profit after tax | 100.30 | 163.58 | 213.18 | 54.28 |
Target of IPO
Gandhar Oil Refinery’s IPO size is Rs 569 crore, including both fresh issue and OFS.
#1 – Offering price (OFS), Rs 198.69 million – This becomes the property of the selling shareholder and the company does not receive any profit from it.
#2 – New issue amount 30.2 billion rupees – These funds will be used to:
- Investment in Texol through loan to fund repayment/advance of loan availed by Texol from Bank of Baroda
- Capital investment through the purchase of equipment and civil engineering work necessary to expand the production capacity of automotive oil at the Silvassa Plant
- Financing a company’s working capital requirements
- General corporate purposes
Gandar Oil Refinery IPO – Positive aspects
- The company is a leading manufacturer of white oils serving consumer and medical end industries.
- The company has an extensive and diverse customer base and a supplier base comprised of major oil companies with competitive pricing terms. The company has a resilient, flexible and scalable business model with a prudent risk management framework.
- We boast stable financial performance in terms of both sales and profits.
Gandar Oil Refinery IPO – Risks and Negatives
- The corporate objectives of the IPO include OFS and new revenue. OFS’s funds will be used to sell shareholders and the company will receive nothing.
- The Company relies heavily on its Personal Care, Healthcare and Performance Oils business segments, and any downturn in the industry could adversely affect its business.
- It is subject to rigorous quality requirements and standards and inspections, and the acceptance of its products by its customers is highly dependent on its ability to meet such quality requirements and standards.
- If we fail to effectively manage our growth and expansion or successfully execute our business plans and growth strategies, our business could be adversely affected.
- The Company and some of its promoters are involved in certain regulatory actions (including notices and subpoenas requesting information from the Enforcement Directorate and the Central Bureau of Investigation) and certain criminal proceedings and investigations. An adverse outcome of any such matter could adversely affect its business, reputation, financial condition and results of operations.
- The company sources most of its main raw material, base oil, from South Korea and the Gulf Cooperation Council region. If we are unable to obtain base oils from these countries due to a lack of alternative sources, orders for that product may be delayed or canceled.
- We are exposed to the credit risk of our counterparties, and delays in or non-receipt of payments could adversely affect our cash flows and results of operations.
Investors should review all internal and external risk factors set forth in the RHP.
Gandar Oil Refinery IPO valuation
- The IPO price range is between Rs 160 and Rs 169 per share.
- Considering last year’s FY23 EPS of Rs 23.77, the P/E ratio is 7x.
- Considering the last three years’ weighted EPS of Rs 20.11, the P/E ratio is 8x.
- Publicly traded peers such as Privi Specialty Chemicals have a P/E of 222x (highest), Panama Petrochem has a P/E of 8x (lowest), and the industry average P/E ratio is 52.6x. Therefore, an IPO price range of 7x to 8x P/E is attractive.
Also read: Is the Tata Technologies IPO price attractive?
Should you apply for the Gandar Oil Refinery IPO or avoid it?
Gandhar Oil Refinery is a leading manufacturer of white oils serving consumer and medical end industries. The Company has a broad and diverse customer and supply base and a resilient, flexible and scalable business model with a prudent risk management framework. We have a track record of consistent financial performance. IPO pricing is attractive.
The downside is that the OFS portion of the IPO proceeds will be paid to the selling shareholders. In addition to this, several other risk factors have been shown. Gandar oil RHP Which investors should consider it?
Investors who understand all these pros and cons can invest in this IPO.