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Business News/ Markets / Ipo/  Gandhar Oil Refinery India IPO opens: Check out 10 key points from RHP
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Gandhar Oil Refinery India IPO opens: Check out 10 key points from RHP

Gandhar Oil IPO comprises a fresh issue of 1.79 crore shares aggregating to ₹302 crore and an offer for sale (OFS) of 1.18 crore shares aggregating to ₹198.69 crore.

Gandhar Oil IPO price band has been set in the range of ₹160 to ₹169 per equity share of face value of ₹2. (Image: Company Website)Premium
Gandhar Oil IPO price band has been set in the range of 160 to 169 per equity share of face value of 2. (Image: Company Website)

Gandhar Oil Refinery India IPO: The initial public offering (IPO) of Gandhar Oil Refinery India, a prominent manufacturer of white oils, opened for subscription on November 22 with the company planning to raise 500.69 crore from the public offer.

The company had filed its draft red herring prospectus in December 2022 and received market regulator Securities & Exchange Board of India’s (SEBI) approval in June this year.

Gandhar Oil Refinery India has a leading market share in the Indian white oil market with significant overseas presence. Gandhar Oil Refinery India IPO is a book built issue of 500.69 crores. 

Here are 10 key things to know from Gandhar Oil Refinery India IPO RHP:

About Gandhar Oil Refinery India

Gandhar Oil Refinery India is a manufacturer of white oils that caters to the consumer and healthcare end-industries. The company offers an extensive range of over 350 products primarily falling under three categories - personal care, healthcare and performance oils (PHPO), lubricants, and process and insulating oils (PIO) - under the brand name “Divyol".

The company catered to 100 countries across the globe, as of June 2022. It served more than 3,500 clients including companies like Procter & Gamble (P&G), Unilever, Marico, Dabur, Encube, Patanjali Ayurved, Bajaj Consumer Care, Emami and Amrutanjan Healthcare.

Read here: Gandhar Oil IPO opens on November 22, price band set at 160-169 per share

Gandhar Oil Refinery India IPO Details

Gandhar Oil IPO opens for subscription on Wednesday, November 22, and closes on Friday, November 24. The IPO comprises a fresh issue of 1.79 crore shares aggregating to 302 crore and an offer for sale (OFS) of 1.18 crore shares aggregating to 198.69 crore.

Gandhar Oil IPO price band has been set at 160 to 169 per share. The IPO lot size is 88 shares and the minimum investment amount required by retail investors is 14,872. 

ICICI Securities and Nuvama Wealth Management are the book running lead managers of the Gandhar Oil Refinery India IPO, while Link Intime India Private Ltd is the IPO registrar.

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Selling shareholders

In the OFS of Gandhar Oil IPO, promoter-selling shareholders include Kailash Parekh and Gulab Parekh. Other selling shareholders include Green Desert Real Estate, Fleet Line Shipping and Denver Bldg Mat & Décor TR LLC, among others.

Gandhar Oil IPO Objectives

The company plans to utilise the IPO proceeds for capital expenditure in Silvassa plant, expansion in Taloja plant, investment in Texol by way of a loan for financing the repayment or pre-payment of a loan facility availed by Texol, funding working capital requirements and general corporate purposes.

Competitors

In the RHP, the company has mentioned Savita Oil Technologies, Apar Industries, Panama Petrochem, Galaxy Surfactants, Privi Speciality Chemicals, Rossari Biotech and Fairchem Organics as its listed peers.

Industry

Gandhar Oil Refinery India operates in the specialty oil industry and the Indian specialty oil market is estimated to be $7.33 billion in 2023 and reach $9.30 billion by 2028, at a CAGR of 4.9%. In terms of volume, the market is estimated to be 5,578 kilo tonne (KT) in 2023 and reach 7,098 KT by 2028, at a CAGR of 4.9%. 

White oil, the fastest-growing segment of the Indian specialty oil market, is estimated to be worth $0.473 billion in 2023 and reach $0.759 billion by 2028, at a CAGR of 9.9%. In terms of volume, it is expected to reach 1,236 KT by 2028 from 782 KT in 2023, at a CAGR of 9.6%.

Also Read: Gandhar Oil Refinery India IPO opens: GMP, subscription status, issue details, 10 key things to know before subscribing

Management

Ramesh Parekh is the Promoter, Chairperson and Managing Director of Gandhar Oil Refinery India, while Samir Parekh is the Promoter, Vice Chairperson and Joint Managing Director of the company. 

Aslesh Parekh is the promoter and Joint Managing Director of the company.

The chief financial officer of the company is Indrajit Bhattacharyy.

Raj Kishore Singh, Amrita Nautiya and Deena Mehta are Independent Directors of the Company. 

Financials

Gandhar Oil reported a net profit of 213.1 crore in FY23, rising from 184.2 crore in FY22. The company’s net profit in the April-June quarter of FY24 stood at 54.2 crore.

The company’s revenue in FY23 increased to 4,079 crore from 3,389 crore in FY22 and reported CAGR of 25.5% from FY21 to FY23. In Q1FY24, the revenue was 1,070.3 crore.

Also Read: Gandhar Oil Refinery India IPO: 10 key risk factors you should know before investing

Strengths 

Gandhar Oil has a leading market share in the Indian white oil market with significant overseas presence. It has a well-diversified product portfolio with an extensive customer base.

The company can leverage the business growth by identifying and forming strategic joint ventures. It continues to increase overseas sales by expanding product offerings, while its diversified business model could limit the business risk.

Weaknesses

However, a substantial portion of the raw material of the company comes from the limited suppliers, while it does not have long-term agreement with its customers.

Moreover, operating margin of the company has been declining in the past two years and volatility in prices of crude oil is expected to remain a concern.

Read all IPO-related news here

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Published: 22 Nov 2023, 11:30 AM IST
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