Gandhar Oil – About the Company
Gandhar Oil Refinery Limited is one of the leading manufacturers of white oils and India’s largest manufacturer of white oils by revenue in Financial Year 2022. The company is making white oil that is used as an ingredient in global companies making en-user products for the healthcare, consumer, industrial, automotive, tyre, rubber and power sector.
As of Jun 2022, the company has a portfolio of more than 350 products mainly from the segment of personal care, healthcare, and performance oils, insulating oils and lubricants under the brand name “Divyol”.Gandhar Oil Refinery Limited is also one of the top five white oil producer in terms of market share.
Apart from the domestic market, Company is selling its products overseas in more than 100 countries across the world. In FY22, Company supplied its products to more than 3,500 customers, in which top Indian companies are also included.
The customer of Gandhar Oil is Unilever, Dabur, Marico, Procter & Gamble, Patanjali Ayurveda, Emami, Amrutanjan Healthcare and Bajaj Consumer Care. It has three manufacturing and supplying plants two in India and one in UAE to cater for its domestic as well as international clients with a combined yearly production capacity of all manufacturing facilities the company’s was around 497,403 kL, enhanced to 522,403 KL in October 2022.
Gandhar Oil IPO Objectives
The main motive of Gandhar Oil Refinery Limited to raise funds through this IPO is to utilize the Net Proceeds from the Fresh Issue to repay its loan, invest in the capital expenditure and meet the working capital requirements of the Company.
The company will use part of the fresh issue to repay the fund borrowed for the Investment in Texol through a loan
taken from the Bank of Baroda. While some of the parts of the amount raised through IPO will be also used for the working capital need of the Company.
However, apart from using some portion for corporate general purposes, the major portion of the fund will be utilized for Capital expenditure through the purchase of equipment and civil work required for:
(i)To expand the the capacity of automotive oil at the Silvassa Plant;
(ii) Enhance the capacity of petroleum jelly and accompanying cosmetic product division at the Taloja Plant; and
(iii) To multiply the capacity white oils production by installing blending tanks at the Taloja Plant.
Gandhar Oil IPO Details:
|IPO Open Date||Not Available|
|IPO Close Date||Not Available|
|Listing Date||Not Available|
|Face Value||₹2 per share|
|Lot Size||Not Available|
|Issue Size||Not Available|
|Fresh Issue||[●] shares (aggregating up to ₹357 Cr)|
|Offer For Sale||12,036,380 shares (aggregating up to ₹[●] Cr)|
|Issue Type||Book Built Issue IPO|
|Listing At||BSE, NSE|
|QIB Shares Offered||Not more than 50% of the Offer|
|NII (HNI) Shares Offered||Not less than 15% of the Offer|
|Retail Shares Offered||Not less than 35% of the Offer|
Gandhar Oil IPO Issue Price & Size
Gandhar Oil IPO Issue Price will be between Rs XXXX to Rs XXXX. The IPO entails the fresh issue of Rs 357 crore and an offer for the sale of up to 12,036,380 equity shares will be sold by the shareholders. The offer for sale consists up to 6.75 million equity shares of Promoters Selling their part Shareholdings and up to 5.27 million equity shares by existing investors.
Gandhar Oil IPO Launch Date
Gandhar Oil IPO will be open between XXXX to XXXX. Investors can apply for this IPO during this period and no application will be accepted after the closing date of the Gandhar Oil IPO date. Along with the IPO launch date, the date for IPO allotment and listing will be also announced.
Gandhar Oil Financial Statements:
|Particulars (Rs Cr.)||FY23 (3M)||FY22||FY21||FY20||CAGR|
|Revenue from Operations||883.94||3543.32||2220.80||2503.63||12.30%|
|Cost of Goods Sold||741.11||3056.16||1933.73||2174.52||12.00%|
|Share of profit/(loss) of a joint venture||0||0||7.11||-1.00|
Gandhar Oil Financial Performance
At the financial end, Gandhar Oil has given significant performance in the last three years. During FY20 to FY23, the revenue of the company grew at CAGR of 12.30% to Rs. 883.94 (only 3 months of sales) from Rs. 2503.63 crore in FY20.
However, during the same period the EBITDA, of the company grew at CAGR of 54.70% and that is thanks to improved EBITDA margins. In FY20, the operating margin of the company was merely 2.93% and now in the first quarter of FY23, it has surged to 10.93%.
For the same period, the bottom-line growth of the company was also very impressive. In FY20 company earned a net profit of Rs. 9.86 crore that reached Rs. 65.02 crore in the first three months of FY23. The profit after tax margins of the company was 0.39% in FY20, which has been improved many fold to reach 7.36%, and that is thanks to lowering the cost interest paid by the company borrowed the loan in fast financial years.
Gandhar Oil IPO Promoters & Shareholding of the Company
Mr Ramesh Babulal Parekh, Mr Samir Ramesh Parekh and Mr Aslesh Ramesh Parekh are the promoters and Chairperson & Managing Director, Vice Chairperson & Joint Managing Director and Promoter & Joint Managing Director of the Company respectively.
Shareholdings of the Gandhar Oil Shareholders:
|S.NO.||Name of the Investors||No. of Shares||% of shareholding|
|1||Mr. Ramesh Babulal Parekh||3,01,50,000||37.69%|
|2||Ms. Gulab Parekh||1,08,00,000||13.50%|
|3||Mr. Kailash Parekh||93,00,000||11.63%|
|4||Green Desert Real Estate Brokers||30,00,000||3.75%|
|5||Ms. Sunita Parekh||27,00,000||3.38%|
|6||IDFC Asset Management Company Limited||22,03,565||2.75%|
|7||Mr. Rajiv Parekh||21,25,000||2.66%|
|8||Mr. Saurabh Parekh||20,50,000||2.56%|
|9||Mr. Kunal Parekh||19,25,000||2.41%|
|10||Mr. Aslesh Ramesh Parekh||19,25,000||2.41%|
|11||Mr. Samir Ramesh Parekh||19,25,000||2.41%|
|12||Ms. DivyaBinit Shah||15,50,000||1.94%|
|13||Ms. Pooja Shah||15,50,000||1.94%|
|14||Ms. Padmini Parekh||15,00,000||1.88%|
|15||Denver Bldg. Mat. & Decor TR. LLC||10,00,000||1.25%|
|16||Fleet Line Shipping Services LLC||10,00,000||1.25%|
Why Invest in Gandhar Oil IPO?
Investing in this IPO or shares of any company you need strong fundamental reasons so that it can give you significant returns over years. Hence, if you are looking to invest in this IPO, you can consider the following pros and cons.
- In white oil manufacturing, there are only a few players in the market globally. The top 10 players are accounting more than 45% market of entire white oil globally. And by revenue, Gandhar Oil Refinery Limited is one of the leading manufacturers of white oils in India with a market share in the top five players of white oil globally.
- Gandhar Oil has a strong customer base with global well-known companies from different sectors buying white oil on a regular basis. In the PHPO division, the customers are Unilever, Emami, P&G, Marico, Patanjali Ayurved, Dabur, Bajaj Consumer Care, Encube, Supreme Petrochem, Amrutanjan Healthcare, and other leading pharmaceutical products manufacturers in India.
- At the financial end, the performance of the company is very impressive. Though, the revenue of the company has not shown significant growth during FY20 to FY23 the operating margin of the company has grown at a CAGR of 54% that is due to improved EBITDA margins that is improved by 8% from 2.93% in FY20 to 10.93 in FY23. The bottom-line margins of the company also improved from 0.39% to 7.36% in FY23 that is because of lowering the interest cost for the same period.
- In the lubricant segment, it has well-known clients like Gulf Oil, Adani Ports and Special Economic Zone, and other users of industrial machines and equipment. While in the PIO division, its customers are Toshiba Transmission and Distribution Systems (India) and other top manufacturers of transformers and power distribution and transmission companies. And the company has long-standing relationships with these clients and the company is getting more than 85% of respective orders from these clients.
- Moreover, Gandhar Oil has in-house R&D capabilities at its strategically located manufacturing plants with a highly resilient, flexible and scalable business model with a prudent risk management framework to perform in various conditions. The management of the company is also experienced and well-qualified to take the favourable decision for the growth of the company.
- Gandhar Oil Refinery Limited is producing its products for companies from the end industries, and any kind of decline in demand from the customer end will also have an adverse effect on the business, resulting in the revenue and growth of the company.
- At the supplier's end, any kind of disruptions in raw material supply or increase in the cost of the raw material will adversely impact the bottom-line margin growth of the company, resulting the low cash flow and return on investment.
- As Gandhar Oil Refinery Limited doesn't have a long-term agreement with all its customers, and if these customers are not ready to give orders again, may face a revenue growth problem if unable to find new customers to maintain its revenue growth.
- The main business of the company is producing white oil and lubricant for healthcare, personal care and performance oil, and any kind of disturbance in the demand for such products in the market will also affect the growth and revenue of the company.
- Apart from that for any company, there are many risks associated with economic factors, industry or sector and company-specific, that can disturb the growth of the company
Gandhar Oil IPO Grey Market Premium
The Grey Market Premium (GMP) of the Gandhar Oil IPO will be known as per the demand for the equity shares when the IPO date and price will be open. If the IPO issue price of Gandhar Oil IPO is launched at a discounted price then the GMP will be higher.
However, if the company's share price is very high or issued at a premium price in the primary market, then the GMP will be not that much or can be negligible in the grey market. The GMP in IPO can be the deciding factor while investing in the shares.
Gandhar Oil IPO Review & Analysis
Though, there is no doubt Gandhar Oil Refinery is one of the leading players in producing white oil in the industry. The operating margin and net profit margin of the company are improving at a promising rate, company has to focus on increasing revenue growth, to add more operating profits and wealth to the investors of the company.
And to increase its revenue, the company is going to expand the production capacity of the company by revamping the existing plants and installing the new plants. And to meet this capital expenditure company is raising the fund through an IPO. Raising funds through IPO will help to reduce the interest cost of the company which will improve its profit margins resulting in the high EPS and making the valuation of equity share of the company more attractive.
Though the company has several risk factors while operating in this business it has provisions for dealing with such situations and making sure its revenue growth and bottom-line margins will not be affected making the company keep growing. And with the increasing demand for white oil in the personal care and healthcare industry will help the company to add new customers in this segment and also boost the revenue in the coming years.
As the IPO price has not been disclosed yet, so it would be not possible to evaluate the share price of the company or compare it with peer group members. Suppose, if the share price of Gandhar Oil is issued at a price where it prices to earnings ratio is quite lower than the sector or its peer group members, then it would be worth investing in the IPO.
However, if the share price is not issued at much discount or issued at par with the sector's price-to-earnings ratio, then you can apply for the IPO from the long-term investment point of view, or wait for the listing and buy from the secondary market.
How to Apply for Gandhar Oil IPO?
Applying for the IPO became hassle-free since Moneysukh launched its online trading platform for retail customers. If you have an account with Moneysukh you can easily apply for this IPO otherwise open a trading and demat account here and follow the steps.
Steps to Apply for Gandhar Refinery Oil IPO:
Step 1: Wait for the date Gandhar Oil IPO opens for online bidding.
Step 2:Now browse trade.moneysukh.com and log in with your User ID & password.
Step 3:Here find the IPO section and select the Gandhar Oil IPO.
Step 4: Now you have to fill in the various details like price, quantity, and so on.
Note: While applying in any IPO, always bid at the cutoff price before submitting your application.
Step 5:Before submitting make the payment and your IPO application is successful.
How to Check Gandhar Oil IPO Allotment Status?
Just like applying for the IPO, checking the status is also very easy with the Moneysukh. You can check the IPO status only when the IPO is closed and the share allotment is done. If you have been allotted any shares they will be directly transferred into your demat account that you can sell on the day of listing or later on.
However, if you have not been allotted any share, your amount will be refunded to your bank account. If an IPO is oversubscribed, there is less chance of getting the shares in the allotment. Hence, you should always apply at the cutoff price and wait till the allotment.