Sigachi Industries IPO GMP, Financials, allotment, and detailed review

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Sigachi industries Limited introduction

Sigachi industries were incorporated as a private limited company in 1989 in Hyderabad. With over 30 years of continuous growth, three multi-locational manufacturing facilities, and a consistent focus on delivering a superior quality product, Sigachi Industries is one of the leading manufacturers of cellulose-based excipients in India, in terms of volume.

Sigachi Industries are engaged in manufacturing microcrystalline cellulose (MCC) which is widely used as an excipient for finished dosages in the pharmaceutical industry. Currently, it manufactures 59 different grades of MCC at the manufacturing units, situated in Hyderabad and Gujarat

Sigachi Industries IPO objective

Sigachi Industries proposes to utilize the Net Proceeds from the Issue towards the following objects:

  1. Expansion of production facilities for microcrystalline cellulose (MCC) at Dahej, Gujarat;
  2. Expansion of production facilities for microcrystalline cellulose (MCC) at Jhagadia, Gujarat;
  3. General Corporate Purposes

Sigachi Industries Limited Manufacturing Units

Sigachi Industries has in total three manufacturing facilities :

Unit – I situated at Hyderabad, Unit– II and Unit – III is situated at Jhagadia and Dahej, respectively located in Gujarat.

Why to invest in Sigachi Industries IPO?

1. Sigachi Industries is one of the leading excipient manufacturers among the market leaders of
cellulose-based excipients in India.

2. It has over 30 years of experience in manufacturing cellulose-based excipients in India

3. Company has been also been awarded certifications for maintenance of quality management systems in the production of Micro Crystalline Cellulose / Powdered Cellulose

4. Sigachi Industries has shown consistent growth in revenue as well as profit

5. Company gets government incentives

What are the risk factors in Sigachi Industries IPO?

1. A significant portion of the Sigachi industries revenue depends on the pharmaceutical industry, any downturn can lead to adverse effects for the company.

2. A significant portion of Sigachi Industries revenue comes from a few customers, and any decrease in revenues or sales from any one of our key customers may adversely affect their business.

3. Their key raw material is a wood pulp sheet, So any change in forest reserves may lead to high raw material costs.

4. there have also been instances where Sigachi Industries has inadvertently filed incorrect information with the RoC in its statutory filings.

Who are the promoters of Sigachi Industries Limited?

Rabindra Prasad Sinha, Chidambarnathan Shanmuganathan, Amit Raj Sinha, and RPS Projects & Developers Private Limited are the promoters of the company.

Financial track record of Sigachi Industries Limited

Financial Year EndedRevenue (₹ Crores)PAT (₹ Crores)EPS (₹)
March 20191,328.78190.138.25
March 20201,439.49203.168.81
March 20211,960.11302.6013.13
Three months ended June 2020448.1660.5932.63
Three months ended June 2021551.2289.8973.9
Sigachi Industries Limited Financials

Sigachi Industries IPO open date & close date

Open date:1st November 2021, Close date: 3rd November 2021

Sigachi Industries IPO Finalization of Allotment, refund date & listing date

Allotment date:10th November 2021, Refund date: 11th November 2021, Listing date: 15th November 2021

Sigachi Industries IPO allotment check

Sigachi Industries IPO allotment can be checked on the registrar website

Sigachi Industries IPO Price band

Price range161 – 163
Minimum order quantity90 shares
Issue sizeRs 125.43 crores

Sigachi Industries IPO GMP today

As of 9th Nov 2021, the Grey market price is Rs 185

Sigachi Industries IPO retail portion and other’s portion

QIB 50% 3847500 Shares = Rs 62.71 Crores
NII 15% 1154,250 Shares = Rs 18.82 Crores
RII 35% 2693250 Shares = Rs 43.90 Crores
Lot size: 90 Shares = 29925 Forms

Is Sigachi Industries IPO price overpriced?

Calculating with its upper price band of Rs 163

Now, the EPS (earning per share) for the FY21 is 13.13 so the P.E ratio (price to earnings ratio) comes at 163/13.13 = 12.4X

And, the EPS for Q1 FY22 EPS is Rs 3.9 so the P.E ratio comes at 163/3.9 = 41.8x but when we annualize it 41.8/4 = 10.44x is the annual P.E they are asking for FY22

So, they are asking P.E between 10x to 13x which is reasonable, thus Sigachi Industries IPO is reasonably priced

Sigachi industries IPO good or bad?

There are no listed peers who are doing exact similar business, so if we also compare with pharma sector P.E which is between 7x to 500x, however, it is still reasonably priced.

According to my personal view, it seems a good investment with unique business and also consistent growth.

Rating: 5 out of 5.


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Disclaimer: I am not SEBI registered, Kindly do your own research before any decision, my views are for educational purpose only

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