IPO listed on 30 Nov'23
Gandhar Oil Refinery India Ltd
Minimum Investment
₹ 14,872 / 88 shares
Grey market premium
₹ 76 (45% premium)
Issue price
₹ 169
Listing price
₹ 298
Listing gains
129 (76%)
Listing on
Nov 30, 2023
Our Verdict:
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- The firm exhibits an impressive growth trajectory in terms of both its revenues and earnings, complemented by superior return ratios. Its inventory turnover period is one of the shortest in the industry. The firm also holds a substantial 26% share in the local market.
- In terms of valuation, the IPO seems attractively priced with a P/E ratio of 7.6x on FY24's projected earnings, which is lower than its counterparts. Additionally, the grey market premium for the issue suggests a premium listing.
- Considering these aspects, it is advisable for investors to consider participating in this IPO from a long-term perspective.
About the company
Founded in
7 Oct'92
Managing director
Ramesh Babulal Parekh
- Gandhar Oil Refinery India Ltd (Gandhar) stands out as a prominent white oil producer, with a focus on the consumer and healthcare industries. As of June 30, 2023, it boasts a diverse portfolio of 440+ products. These products serve as key components in the production of various consumer, healthcare, automotive, industrial, power, and tyre and rubber goods.
- The company operates three manufacturing units, with a total annual capacity of 522,403 kL. These facilities are in Taloja and Silvassa in India, and Sharjah in the UAE. Its products are sold in over 100 countries, serving more than 3,500 clients worldwide.
STRENGTHS
- Robust Financial Growth: From FY21 to FY23, Gandhar displayed impressive growth, with a 36% CAGR in Revenue from Operations, 51% CAGR in EBITDA and 46% CAGR in Net Profit.
- Healthy Return on Investments: In FY23, Return on Equity was a healthy 32.28%, and Return on Capital Employed was even more impressive at 41.19%.
- Distinguished Clientele: Gandhar boasts a varied roster of top-tier clients, including major firms like P&G, Unilever, Marico, Emami, Bajaj Consumer Care, Patanjali, Dabur, Amrutanjan Healthcare, Gulf Oil, and Adani Ports. Their ability to retain customers is notable, with 83.74% of customers reordering in the quarter ending June 30, 2023, and a 69.11% repeat order rate for FY23.
RISK FACTORS
- Cash Flow Concerns: For the quarter ending on June 30, 2023, the firm reported a negative operational cash flow of Rs 132.7 crore. Sustained negative cash flow or significant liquidity crunches could impair the company's ability to maintain its operations.
- Dependency on Critical Raw Material Imports: Gandhar heavily relies on imports for its primary raw material, base oil, mainly sourced from South Korea and the Gulf Cooperation Council (GCC) region, accounting for more than 70% of its raw material expenses. Supply disruptions, delays, or reductions could negatively impact the company's financial health.
- Compliance Risks: In 2018, the company was issued notices by the Enforcement Directorate and the Central Bureau of Investigation concerning the Foreign Exchange Management Act and income tax regulations. Any negative outcomes in these matters could adversely affect the company's financial stability.
Issue details
Issue type
Mainstream
Issue size
₹ 500.69 crore
Fresh Issue
₹ 302 crore
OFS
₹ 198.69 crore
Price range
₹ 160 - 169
Lot size
88 shares
Issue Objective
The company proposes to utilize the net proceeds from the fresh issue towards the following objects:
- Repayment/pre-payment of a loan facility availed by Texol (material subsidiary) from Bank of Baroda;
- Capital expenditure through purchase of equipment and civil work required for expanding automotive oil, petroleum jelly and cosmetic products, and white oils capacity at the Taloja plant;
- Funding working capital requirements of the company; and
- General corporate purposes
Dates
Bidding open
22 Nov'23
Bidding close
24 Nov'23
Allotment date
27 Nov'23
Refund date
28 Nov'23
Listing
30 Nov'23
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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