Business Profile of Dorf-Ketal Chemicals India Limited
Dorf Ketal Chemical was incorporated in 1992, it is a leading global supplier of specialty chemicals. The company engaged in the business of manufacturing and supplying of specialty chemicals across hydrocarbons and industry supply chains, including the gas and oil, refining, and petrochemical industries. The chemical portfolio of the company includes hydrocarbon-related chemicals like refinery, oil field and fuel additives and industrial chemicals like organometallic titanates, PVF, OBA, and lubricant additives. As of October 31, 2024, the company has 16 manufacturing facilities in four countries out of which eight are situated in India. An R&D facility of the company operates in India, Singapore, Canada and Brazil. The proprietary technologies like ACtifty®, TANSCIENT™, and HCR-7000 are developed by the company for sustainability.
Objective of Dorf-Ketal Chemicals IPO
As per the draft red hearing prospects, the IPO issue consists fresh issue and offer for sale. The fresh issue consists of XXXX shares at the face value of ₨ 5.00 each aggregating up to ₹ 15,000.00 millions and OFS consists XXXX shares at face value of ₨ 5.00 each aggregating up to ₨ 35,000.00 millions. There are fresh shares issues and OFS by company and main objective of company is repayment of debt, investment in subsidiary and general corporate expenses.
Details of Dorf-Ketal Chemicals IPO
| IPO Open Date | N.A. |
| IPO Close Date | N.A. |
| Basis of Allotment | N.A. |
| Listing Date | N.A. |
| Face Value | ₹5.00 per share |
| Price | N.A. |
| Lot Size | N.A. |
| Total Issue Size | Up to XXXX Equity Shares |
| Aggregating up to ₨ 50,000.00million | |
| Fresh Issue | Up to XXXX Equity Shares |
| Aggregating up to ₨ 15,000.00million | |
| Offer For Sale | Up to XXXX Equity Shares |
| Aggregating up to ₨ 35,000.00million | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not more than 50% of the Net Issue |
| Retail Shares Offered | Not more than 35% of the Net Issue |
| NII (HNI) Shares Offered | Not less than 15% of the Net Issue |
Dorf-Ketal Chemicals IPO: Issue Price & Size
The issue price of DORF-KETAL CHEMICALS INDIA LIMITED hasn’t been released yet. Upon releasing the dates, the investors can bid between those price ranges. The company has fresh issue and OFS aggregating up to ₹ 50,000.00million at the price of ₨XXXX.
Launch Date of Dorf-Ketal Chemicals IPO
The IPO opening date of DORF-KETAL CHEMICALS INDIA LIMITED hasn’t been officially announced yet, upon the declaration of dates investor can bid for IPO.
Financial Statements of Dorf-Ketal Chemicals India Limited
| Particulars (Rs in millions) | Ended Sept 30 , 2024 |
Mar 31 , 2024 |
Mar 31 , 2023 |
Mar 31 , 2022 |
| Income | ||||
| Revenue From Operations | 29,613.62 | 54,795.39 | 38,664.81 | 25,895.35 |
| Other Income | 61466 | 800.57 | 319 20 | 431 43 |
| Total Income | 30,228.28 | 55,595.96 | 38,984.01 | 26,326.78 |
| Expenses : | ||||
| Cost of Materials Consumed | 17,412.20 | 27,375.05 | 22,356.71 | 14,425.78 |
| Change in Inventories of Finished Goods and Work - in - Progress | (2,784.73) | (198.68) | (2,385.84) | (465.37) |
| Employee Benefits Expense | 4,978.84 | 9,667.49 | 5,222.81 | 3,831.88 |
| Finance Costs | 1,270.61 | 1,196.92 | 513.08 | 255.71 |
| Depreciation and Amortisation Expense | 962.60 | 1,312.37 | 958.91 | 693.11 |
| Other Expenses | 5,245.20 | 8,416.32 | 5,906.45 | 4,082.16 |
| Total Expenses | 27,084.72 | 47,769.47 | 32,572.12 | 22,823.27 |
| Restated Profit before Exceptional Items and share of P&L of Associates and JVs | 3,143.56 | 7,826.49 | 6,411.89 | 3,503.51 |
| Exceptional Items | - | - | (218.00) | (201.30) |
| Restated P&L before of Associates and JVs | 3,143.56 | 7,826.49 | 6,193.89 | 3,302.21 |
| Share of P&L of associate and JVs | (10.21) | (31.01) | (35.01) | (1.53) |
| Restated Profit Before Tax | 3,133.35 | 7,795.48 | 6,158.88 | 3,300.68 |
| Tax Expense / ( Benefit ) | ||||
| ( 1 ) Current tax | 965.41 | 1,705.41 | 1,384.16 | 716.54 |
| ( 2 ) Deferred tax | (161.42) | 118.68 | 263.50 | (75.59) |
| ( 3 ) Prior years ' tax adjustments | 12.96 | (48.27) | 0.19 | 0.05 |
| Total Tax Expenses | 816.95 | 1,775.82 | 1,647.85 | 641.00 |
| Restated Profit After Tax for the period / year | 2,316.40 | 6,019.66 | 4,511.03 | 2,659.68 |
Key financial ratios of Dorf-Ketal Chemicals India Limited
| Ratio | FY22 | FY23 | FY24 | FY25 H1 (Ann.) |
| Net Profit Margin | 10.27% | 11.67% | 10.99% | 7.82% |
| EBITDA Margin | 14.74% | 18.91% | 17.34% | 16.05% |
| ROE | 17.25% | 22.34% | 23.39% | 9.09% |
| Current Ratio | 2.09 | 1.76 | 1.67 | 1.85 |
| Quick Ratio | 1.29 | 0.97 | 1.04 | 1.11 |
| Debt to Equity Ratio | 0.19 | 0.53 | 0.4 | 1.01 |
| Interest Coverage Ratio | 13.91x | 13.01x | 7.51x | 3.47x |
| ROCE | 15.16% | 18.09% | 19.33% | 6.40% |
| Net working capital day | 154 | 154 | 120 | 146 |
| EBITDA (Rs in Millions) | 3,818.07 | 7,311.67 | 9,504.20 | 4,751.90 |
Promoters & Shareholding Dorf-Ketal Chemicals India IPO
As of date, according to the DRHP filed with SEBI promoters and promoter group have 99.83% shareholding in company.
| Name | Number of Equity Shares | % Equity Shares |
| (A) Promoters & Promoter Group | ||
| Subodh Menon | 9,84,000 | 0.2 |
| Sudhir Menon | 19,33,060 | 0.39 |
| Menon Family Holdings Trust | 48,37,60,200 | 98.02 |
| Sudhir Menon (HUF) | 58,52,000 | 1.19 |
| Total (A) | 49,25,29,260 | 99.8 |
| (B) Members of Promoter Group | ||
| Padmaja Menon | 57,120 | 0.01 |
| Anilparambil Menon | 1,12,000 | 0.02 |
| Total (B) | 1,69,120 | 0.03 |
| Total (A)+(B) | 49,26,98,380 | 99.83 |
Should You Subscribe To Dorf-Ketal Chemicals IPO
While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.
Competitive Strengths of Dorf-Ketal Chemicals IPO
Diverse portfolio of products
The wide specialty chemical portfolio of the company comprises specialty chemicals for hydrocarbons, which include oil fields, refinery chemicals and petrochemicals, fuel additives, and modified acid as key sub-categories. The diverse product portfolio serving various industries and widespread geographic presence reduce concentration risk. Additionally, the presence in multiple areas of the hydrocarbon value chain helps the company to protect from volatility in crude oil prices.
Strong relationships with customers
The company has developed strong, long-term relationships with many of its customers, which helped the company to grow and expand over the years. Customer relationships are led primarily by the company's ability to develop innovative processes and meet stringent quality and technical specifications. As a result, the company has a history of high customer retention and has been manufacturing products for specific customers for decades.
Global network of manufacturing
The company has manufacturing sites in multiple strategic locations that enable it to meet customer demand globally and locally. According to the F&S report, the industry in which the company operates is characterized by the production of high-value performance-enhancing chemicals tailored for specific applications, and entering this industry poses multiple challenges due to various barriers. Integrated manufacturing with most of the production process performed in-house, combined with technologically demanding aspects of these production processes, gives an advantage over new players in the market.
Track record of delivering growth
According to the report of F&S, as compared to the leading competitors and specialty chemical manufacturers in India, the company delivered the highest growth in terms of revenue, EBITDA, and profit after tax during the financial years 2022-2024. From the financial year 2022 to 2024, revenue from operations grew at a CAGR of 45.47%, EBITDA grew at a CAGR of 57.77% and the company restated profit after tax for the year of 50.44%.
Risk Factors of Dorf-Ketal Chemicals IPO
Environmental Regulatory Risks
The company derives a large portion of its revenue from operations from specialty chemicals of hydrocarbons. This business is subject to climate-related transition risks that could affect the hydrocarbon industry. Usually, it includes evolving climate change legislation, technological advances, fuel conversion measures, and negative shift in market perception towards the oil and natural gas industry, which could reduce demand for company hydrocarbon customer’s products. Any reduction in demand for company specialty hydrocarbons could adversely affect business.
Raw Material Uncertainty
The company does not have a long-term agreement with its raw material supplier. It usually does not enter into long-term supply contracts and typically sources raw materials from suppliers under contracts of shorter periods or open markets for a fixed price. Any inability on their part to procure raw materials from their existing or alternate supplier in a timely fashion and on commercially acceptable terms may negatively affect financial conditions and profit margins.
Oil & Gas Spending Drives Demand
The demand for company products and services in the oilfield, fuel additives, refining, and petrochemicals industries is particularly sensitive to the level of exploration, development, and production activity of, and corresponding capital spending by, oil and gas companies. The level of exploration, development, and production activity is directly affected by trends in demand for and prices of oil & gas. Any long reduction in oil and gas prices will depress the immediate levels of exploration, development, and production activity, which could have an adverse impact on the results of operations and cash flows.
R&D Critical to Future Growth
The future results of operations depend, to a significant degree on the company's ability to successfully develop new products and continue the expansion of its product portfolio in a timely and cost-effective manner. The development and commercialization of new products are challenging, time-consuming, and costly and involve a high degree of business risk. If the company does not successfully develop new products, it may adversely affect business operations.
Dorf-Ketal Chemicals IPO Grey Market Premium
Grey market premium is the premium quoted over the IPO issue price. GMP shows that investors are ready to pay above the upper band of the IPO issue price. GMP is determined in the grey market as per the demand and supply of the shares in the primary market. A grey market is that unofficial ecosystem of unlisted companies' stocks that start trading even before the launch of the IPO to the date of its listing.
Also Read: What is Grey Market Premium in IPO: How is GMP Calculated & Reliable
However, GMP is not a reliable factor, as it keeps fluctuating as per the demand and supply of shares in the primary market. There are numerous factors that affect the stock market in India and individual stock prices of different companies that are already listed and trading in the secondary market. However, for an IPO-bounded company, you can consider the GMP as the speculative listing price of the share
According to various online sources, the Grey Market Premium or GMP of the Dorf-Ketal Chemicals India Limited is trading around Rs XX in the grey market. It means shares are trading at the upper band issue price of Rs XX with a premium in the grey market and may list around the same price.
