Sigachi Industries Limited IPO - IPO Alert

Sigachi Industries Limited IPO – Outlook & Valuation

Issue Offer
Issue Opens on  Nov 01, 2021
Issue Close on  Nov 03, 2021
Total IPO size (cr)  125.43
Fresh issue  125.43
Offer For Sale (cr)  Nil
Price Band (INR)  161-163
Market Lot  90
Face Value (INR)  10
Retail Allocation  35%
Listing On  NSE, BSE
Objects of the issue 

CAPEX of MCC at Dahej, Gujarat 

CAPEX of MCC at Jhagadia, Gujarat CAPEX of CCS at Kurnool 

For General Corporate Purposes.

Issue Break-up (%)
QIB Portion  50
NIB Portion  15
Retail Portion  35
Share Holding Pattern %
Promoters & Promoter group  64.6  48.5
Public  35.4  51.5
Indicative Timetable
Finalisation of Basis of  Allotment  10-11-2021

ASBA Fund 

Credit of equity shares to  DP A/c  12-11-2021
Trading commences  15-11-2021

Sigachi Industries was incorporated as a private limited company in  1989, with the business to manufacture chlorinated paraffin and hydrochloric acid in its manufacturing unit situated at Hyderabad.

In the year 1990, Company diversified its product portfolio to manufacture microcrystalline cellulose which is widely used as an excipient for finished dosages in the pharmaceutical industry.

The inert non-reactive, free-flowing and versatile nature of MCC have varied applications in the pharmaceutical, food, nutraceuticals and cosmetic industries. The company manufactures MCC of various grades ranging from 15 microns to 250 microns.

    • The major grades of MCC  manufactured and marketed by our Company are branded as HiCel and  AceCel. It operates three manufacturing units namely, Unit I situated at  Hyderabad and two manufacturing units, Unit II and Unit III are situated at Jhagadia and Dahej, respectively located in Gujarat.
    • The company has an in-house research and development division located in Unit II and Unit III with the objective to implement a  performance-oriented approach with the help of technologies developed in-house.
    • Received a certificate of suitability from the European Directorate for  the Quality of Medicines and HealthCare on December 4, 2020
    • The company commenced its export operations in the year 1996 by  exporting its first order of MCC to Bangkok
    • The company foresees an increase in demand for MCC and to tap the growing market, it intends to utilize the Net Proceeds of this  Issue to enhance the production capacity 154 of MCC by increasing the existing capacity of Unit II and Unit III and manufacturing of CCS  in the Proposed Unit at Kurnool.

Outlook & Valuation

The company had consistent revenue growth in the last 3 years where they grew at a CAGR of 13%. In FY21 revenue was at Rs 196 crore VS Rs 133 cr in FY19 while profit grew at CAGR of  17% and in FY21 net profit was Rs 30 cr Vs Rs 19 cr in FY19. The margins of the company are improving gradually. The CAPEX from the  IPO would also help the company to increase its revenue further.

The  Indian foods and beverage market, as well as the pharmaceutical market, are growing rapidly which should drive MCC’s demand forward.

Due to the small size of the IPO the company is going to list in the T2T  Segment. The IPO is arriving at a PE of 14x on the average EPS of the last three years i.e. Rs. 10.88 and P/BV of 2.19 which seems to be reasonably priced for investors. Thus, we assign a “SUBSCRIBE” rating to the IPO for listing gains and long term.

IPO Note



    • Swami Das Nigam is the Chairman of the Board and Non-Executive Director of the Company and has been associated with the Company since the year 2014.
    • Rabindra Prasad Sinha, is the Whole-time Director, the Chairperson of the Company and one of the Promoters  who has been associated with the Company since its inception
    • Chidambarnathan Shanmuganathan is the Whole-time Director of the Company and is one of the Promoters  associated with the Company since its inception
    • Amit Raj Sinha, is the Managing Director, Chief Executive Officer and is one of the Promoters of the Company
    • Vijaykumar Amrutlal Bhavsar is the Whole-time Director of the Company. He has an experience of more than  two decades in the chemical and pharmaceutical industry
    •  Dhanalakshmi Guntaka is an Additional Independent Director of the Company. She was appointed as an  Additional Director of the Company with effect from October 18, 2021. 
    • Lijo Stephen Chacko is an Independent Director of our Company
    • Sarveswara Reddy Sanivarapu, aged 56 years is an Independent Director of the Company. He is an associate of the Institute of Company Secretaries of India and has also received the certificate of practice as a company secretary.


    • One of the leading manufacturers of MCC (cellulose-based excipient) in India with over 30 years of experience.
    • Pan India and International market presence.  
    • Well experienced management team with proven project management and implementation skills.
    • A comprehensive product portfolio enables them to serve diverse end-use applications.  
    • Presence across diverse industry verticals with long-standing relationships with customers.
    • Growth led by continuous investment and focus on R&D.
    • Quality Assurance and Quality Control of products
    • Strategically located manufacturing facilities


    • Increasing manufacturing capacity to focus on the growing demand for core products.
    • Increasing focus on its core business segment
    • Diversifying and increasing penetration in markets
    • Increasing its global presence


    • Depending on a few customers, for a significant portion of their revenue
    • The company has received a Demand Notice from Saffron Capital Advisors Private Limited, under the Insolvency  and Bankruptcy Code, 2016
    • The company has benefited from certain export benefits from the Government of India, which is withdrawn or modified may have a significant impact on results operations.
    • There are outstanding litigations involving the Company
    • The company is subject to foreign exchange control regulations which can pose a risk of currency fluctuations.

IPO Note



There are no listed companies in India that engage in a business similar to that of the Company. Accordingly, it is not possible to provide an industry comparison in relation to the Company. However, The IPO is arriving at a PE of 14x on the average EPS of the last three years i.e. Rs. 10.88 and P/BV of 2.19 which seems to be reasonably priced for investors.


Particulars (Rs. In Lacs) FY 2021 FY 2020 FY 2019
Equity Share Capital 768.25 768.25 307.30
Other Equity 8,651.69 5,690.27 4,180.97
Net Worth 9,419.94 6,458.52 4,488.27
Total Borrowings 2092.70 3,037.94 2,519.11
Revenue from Operations 19,275.58 13,906.26 12,898.81
EBITDA 4,204.44 2,965.00 2,985.12
Profit Before Tax 3,848.37 2,534.39 2,472.84
Net Profit for the year 3,026.03 2,031.55 1,901.27

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