IPO Details and Fund Utilization
Gujarat-based pharmaceutical company Allchem Lifescience has taken a significant step toward going public by submitting its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI). The company seeks regulatory approval for its initial public offering (IPO), which will include a fresh issue of equity shares worth INR 190 crore and an offer for sale (OFS) of 71.55 lakh equity shares by its promoters, Kantilal Ramanlal Patel and Manisha Bipin Patel.
The proceeds from the fresh issue will primarily be used for debt repayment, with INR 130 crore earmarked for this purpose. The remaining funds will be allocated for general corporate expenses and business expansion initiatives. The IPO is expected to enhance Allchem’s financial stability and support its long-term growth strategy.
Company Background and Business Operations
Founded in 2017, Allchem Lifescience specializes in the manufacturing of active pharmaceutical ingredient (API) intermediates and specialty chemicals. The company focuses on producing key starting materials (KSMs) and API intermediates, including piperazine derivatives, which are essential for the production of schizophrenia and bipolar disorder drugs like quetiapine.
Allchem has built a strong product portfolio with 263 different chemical compounds, emphasizing the development of high-demand products that are either difficult to source domestically or serve as import substitutes. This strategic approach enables the company to cater to the growing demand in the pharmaceutical sector while reducing dependence on imports.
Manufacturing, Clientele, and Financial Performance
Allchem Lifescience operates a state-of-the-art manufacturing facility in Vadodara, Gujarat, serving both domestic and international markets. The company has established a broad client base, supplying products to 148 customers across 13 Indian states and 66 clients in 22 countries worldwide. Its clientele includes well-known pharmaceutical companies such as Alembic Pharmaceuticals, Indoco Remedies, Micro Labs, MSN Laboratories, Neogen Chemicals, and Unichem Laboratories.
Financially, Allchem has demonstrated strong growth, with its revenue increasing at a compound annual growth rate (CAGR) of 12.7% between FY22 and FY24. For the six months ending September 30, 2024, the company reported a revenue of INR 7.84 crore. Meanwhile, its profit after tax (PAT) has grown at a CAGR of 28.6% between March 2022 and March 2024, reaching INR 1.09 crore for the six months ending September 2024.
With a diverse product portfolio, a growing customer base, and a strong financial track record, Allchem Lifescience’s IPO is expected to attract significant interest from investors looking for opportunities in the pharmaceutical and specialty chemicals sector.
