Citichem India Ltd is set to launch its initial public offering (IPO) from December 27 to December 31, 2024, aiming to raise approximately ₹12.60 crores through the issuance of 18 lakh equity shares priced at ₹70 each. This fresh issue will primarily fund working capital requirements and the purchase of transportation vehicles. Citichem India specializes in procuring and supplying organic and inorganic chemicals, as well as bulk drugs, catering to various industries including pharmaceuticals and food.
₹20
₹70
₹70
Expert Opinions
Market sentiment for the Citichem India IPO is cautiously optimistic, as investors are showing interest in the specialty chemicals sector amid a growing demand for high-quality chemical products. Company strengths include over 25 years of experience in the industry, a diverse product range catering to pharmaceuticals, food, and other sectors, and strong relationships with suppliers and customers that ensure steady demand.
However, risks and challenges involve fluctuating revenue trends, pending litigation amounting to approximately ₹190 crores, and dependence on leased facilities which may limit scalability. The valuation analysis sets the IPO price at ₹70 per share, which appears reasonable given the company’s potential for growth. From a long-term investment perspective, Citichem India is well-positioned to benefit from the expanding specialty chemicals market in India, making this IPO an attractive opportunity for investors willing to navigate the associated risks while capitalizing on future growth prospects.
Investor Considerations
Citichem India Ltd has demonstrated a mixed performance in recent years, with revenue experiencing significant fluctuations, dropping from ₹18,016.73 lakhs in 2021 to ₹1,236.85 lakhs in December 2022. The sector outlook for specialty chemicals is positive, driven by increasing demand across pharmaceuticals, food, and other industries. The IPO valuation is set at ₹70 per share, aiming to raise ₹12.60 crores, which appears reasonable given the company’s established market position.
Growth prospects are promising as Citichem plans to diversify its procurement sources and expand its product offerings. However, risk factors include dependence on leased facilities, potential regulatory challenges, and fluctuations in raw material prices. A long-term investment horizon is advisable, as Citichem India is positioned to leverage growth opportunities in the expanding specialty chemicals market while managing inherent risks effectively.
| Date | GMP | Trend |
|---|---|---|
| 02 Jan 2025 10.37 | ₹20 | --- |
| 01 Jan 2025 10.58 | ₹20 | --- |
| 31 Dec 2024 10.45 | ₹20 | Down |
| 30 Dec 2024 10.55 | ₹30 | --- |
| 29 Dec 2024 12.04 | ₹30 | --- |
| 28 Dec 2024 11.32 | ₹30 | --- |
| 27 Dec 2024 11.12 | ₹30 | --- |
| 26 Dec 2024 11.17 | ₹30 | Up |
| 25 Dec 2024 11.21 | ₹00 | --- |
| 24 Dec 2024 10.54 | ₹00 | --- |
| 23 Dec 2024 18.10 | ₹00 | --- |
FAQs
The Grey Market Premium showed poor accuracy in predicting Citichem India’s listing performance. While the GMP of ₹20 predicted a positive premium of 28.57% over the issue price, the stock actually listed flat with no gains or losses. With a significant prediction error of 22.22%, the GMP completely failed to predict the flat listing, demonstrating its unreliability as a price predictor in this case.
Citichem India IPO Current GMP is ₹20.
Citichem India IPO Expected Returns is 28.57%.
Citichem India IPO estimated listing price is ₹90.