Supreet Chemicals Limited IPO

01At a glance

What the company does: manufactures specialty chemical intermediates across three product families, aromatic amines and sulphonamides, amino phenols, and other specialties, handling more than 15 chemistries; the F&S report it cites calls it a leading maker of MCA, sulphonamides and NAPSA (DRHP p.22). It runs three plants at Vapi with 6,962 tonnes a year of capacity (DRHP p.32).

Who pays it: chemical, textile, pharmaceutical, agrochemical and personal-care manufacturers in India and abroad; the top ten customers were 56.25% of FY25 revenue and exports 25.54%, mainly to China, Mexico and Thailand (DRHP p.26, DRHP p.38).

Why it is raising money: ₹3,100.00 million for a fourth, greenfield plant at Vapi, ₹650.00 million to repay borrowings, and the rest for general purposes (DRHP p.23, DRHP p.26).

How fast it has grown: revenue of ₹3,127 million in FY23, ₹2,398 million in FY24 and ₹3,625 million in FY25 (DRHP p.24).

The one thing to understand: a cyclical chemicals maker expanding on borrowed money ahead of the offer. Revenue fell 23% and EBITDA 58% in FY24 before recovering, and the company spent ₹1,928.01 million on plant over three years, lifting borrowings from ₹46.60 million to ₹2,007.03 million (DRHP p.24, DRHP p.165, DRHP p.241, our arithmetic).

02The business, in plain words

A chemical-intermediates maker runs multi-step reactions on basic chemicals to produce ingredients that other manufacturers use to make dyes, drugs, crop chemicals and personal-care products, and sells them in bulk under purchase orders.

A dye maker needs an amine intermediate → it places a purchase order with Supreet → Supreet makes the batch at Vapi and ships it → the dye maker pays on agreed terms.

Earnings equation: Profit ≈ tonnes sold × (price − raw-material and processing cost) − interest. EBITDA margin was 21.63% in FY25 against 30.78% in FY23 (DRHP p.165).

03Where the money comes from

Source: DRHP p.26, DRHP p.38. Key end-use industries are textiles, pharmaceuticals, performance chemicals, personal care and agrochemicals (DRHP p.26).

04The growth record

Source: DRHP p.24, DRHP p.165, DRHP p.308.

Cash from operations was ₹353.39 million in FY25 (DRHP p.308). Other income was ₹66.03 million in FY25 against profit before tax of ₹688.30 million, or 9.6% (our arithmetic, DRHP p.239).

05What the growth is made of

A cycle. Revenue fell 23.3% in FY24 and rose 51.2% in FY25, with margin recovering only partly (our arithmetic, DRHP p.165).

06Earnings quality

Operating cash flow over FY23 to FY25 was ₹842.09 million against profit of ₹1,338.53 million (our arithmetic, DRHP p.24, DRHP p.308). Payments for plant and equipment were ₹194.58 million, ₹565.35 million and ₹1,168.08 million in FY23, FY24 and FY25 (DRHP p.241). The company says it cannot trace share transfer forms for some past transfers and has relied on other records (DRHP p.91).

07The balance sheet

Source: DRHP p.24.

08What the money is for

Source: DRHP p.23. A pre-IPO placement of up to 20% of the fresh issue may be made (DRHP p.22).

09Who is selling

Nobody. The issue is a fresh issue only, of up to ₹4,990 million (DRHP p.22). In May 2025, promoter Narendrakaur H. Sarna transferred 2,376,471 shares at ₹153 each to Protons Corporate Services and four individuals (DRHP p.91).

10Promoters

The promoters are Harjindersingh Jaswantsingh Sarna, Narendrakaur H. Sarna and Manjeetsingh Gurbirsingh Sarna (DRHP p.22). A tax proceeding involving ₹274.85 million is pending against a promoter who is also a director (DRHP p.25). Remuneration paid to the three promoters together was ₹64.20 million in FY23 and ₹29.40 million in FY25 (our arithmetic, DRHP p.27).

11Who already owns it

Source: DRHP p.23, DRHP p.95. The last row is our arithmetic.

Protons Corporate Services Private Limited holds 2.80% before the issue (DRHP p.95).

12What changed just before the IPO

• Share transfers: promoter shares transferred at ₹153 each in May 2025 (DRHP p.91).
• Borrowings: up to ₹2,007 million to fund capex (DRHP p.24).
• Recovery: revenue and margin up in FY25 (DRHP p.165).
• Split and bonus: shares of ₹100 face value were split into shares of ₹2 in August 2022, and a bonus issue of 30 shares for every share held followed in August 2022 (DRHP p.83).
• Auditor: there has been no change in the statutory auditors in the last three years (DRHP p.75).
• Public company: the company was converted into a public limited company, with a fresh certificate of incorporation in November 2022 (DRHP p.2).

13Capacity and expansion

Three plants at Vapi with 6,962 tonnes a year; the proceeds fund a fourth, greenfield plant there (DRHP p.23, DRHP p.32). The document lists delays and cost overruns on this project as a top risk (DRHP p.26).

14Market size and industry structure

The F&S report cited in the offer document values the global specialty chemical intermediates market at USD 1,309 billion in 2024, projects USD 1,802 billion by 2029, and expects India's market to grow about 10% a year from 2025 to 2030 (DRHP p.22). Those projections are F&S's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• Leading positions in MCA, sulphonamides and NAPSA, citing F&S (DRHP p.22).
• Chemistry breadth: over 15 chemistries and multi-step processes (DRHP p.22).

Against that: all plants in one town, customer concentration, purchase orders rather than contracts, raw-material volatility and export exposure (DRHP p.26).

16Peers the company named

The peer set is Deepak Nitrite, Aarti Industries, Atul, Balaji Amines, Alkyl Amines Chemicals, Neogen Chemicals and Rossari Biotech, with P/E ratios from 25.06 to 108.95, average 47.89 (DRHP p.114).

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Vapi. All plants and the new project in one place (DRHP p.26).
• Customers. Ten customers were 56% of revenue, on purchase orders (DRHP p.26).
• Cycles. Margin swung from 31% to 17% and back to 22% (DRHP p.165).
• Exports. A quarter of revenue, mainly to three countries (DRHP p.38).
• Project. The greenfield plant may be delayed or cost more (DRHP p.26).

18Litigation and regulatory matters

Source: DRHP p.25.

19Related-party transactions

Not read in detail for this study.

20What the offer document does not say

In the sections read for this study, the document does not give:

• What the ₹274.85 million tax matter against a promoter concerns, in the pages read.
• What the greenfield plant will make and its capacity, in the pages read.
• Why FY24 revenue and margin fell, in the pages read.
• Who Protons Corporate Services is, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. What caused the FY24 fall in revenue and margin, and has it fully reversed?
2. What will Manufacturing Facility 4 produce, and for which customers?
3. What is the ₹275 million tax claim against a promoter?
4. Why did a promoter transfer shares at ₹153 in May 2025, and to whom?
5. How much of export revenue depends on buyers in China?

1Sources and cited facts

This study was read from 1 document the company filed. The 51 figures it cites are listed under the document each came from, with the page and the sentence as printed.