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Chemcon IPO: A strong import substitute play, but does it merit investors’ attention?

With respect to the industry’s historical valuation multiple range, Chemcon’s multiples are at the higher end.

September 21, 2020 / 02:32 PM IST
Chemcon IPO: A strong import substitute play, but does it merit investors’ attention?

PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook

Highlights - Leading manufacturer of HMDS and CMIC which are import-dependent - Plans to add two more plants & increase capacity by 70 percent - Supportive balance sheet and strong barriers to entry – key positives - Risk factors: Price volatility, high import dependency and litigation cases (reputation risk), Chemcon Speciality Chemicals (Chemcon) IPO worth Rs 318 crore opens today. It is a strong import substitute play in the field of pharma ingredients along with some niche applications in crude oil and semi-conductor industries. Riding on investor...

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