Citichem India shares hit 5% lower circuit after listing flat on BSE SME

Citichem India Limited made a muted trading debut on Friday, January 3, with its shares listing nearly flat on the BSE SME platform.

Shares of the chemicals producer opened flat at ₹70 apiece on the BSE compared to the IPO price. Soon after listing, the chemicals stock declined up to 5% to hit the lower circuit limit at ₹66.5 apiece.

Within the initial 10 minutes of trade, more than 4.28 lakh shares changed hands on the stock exchange, with a total trading value of ₹2.96 crore. The market capitalisation of the company stood at ₹46.78 crore.

At the listing price of ₹70 per share, the IPO investors would not have made any profit compared to the minimum investment of ₹ 1,40,000 (₹70 x 2,000) for a single lot of shares.

Citichem India raises ₹12.6 crore through IPO

Citichem India Limited, which is a supplier of bulk drugs, chemicals and food chemicals to the pharmaceutical industry, raised ₹12.6 crore through its initial public offering. The IPO comprised only a fresh issuance of 18 lakh shares. The issue price was fixed at ₹70 per share.

The IPO was open for bidding from December 27 to December 31.

According to exchange data, Citichem India Ltd IPO was subscribed 414.4 times at the close of bidding on December 31.

The public offer generated demand for shares worth ₹4,953.94 crore as bids for 70.78 crore shares were received against the net issue size of 17.08 lakh shares.

The fixed-price issue was booked 543.18 times in the retail segment. Applications for more than 46.38 crore shares were received against 8.54 lakh shares on offer. The Non-Institutional Investors (NIIs) applied for nearly 23.74 crore shares against 8.54 lakh shares on offer. The NIIs quota was booked 277.87 times. In the Qualified Institutional Buyers (QIBs) segment, the IPO received bids for over 65.28 lakh shares.

Citichem India IPO: Use of proceeds

Citichem India has proposed to utilise the IPO proceeds for funding capital expenditure for acquisition of property, acquisition of transportation vehicles and accessories, and general corporate purposes.

According to Citichem India RHP, the company has proposed to utilise ₹3.60 crore of PO funds for the buying a property at Bhiwandi, Mumbai for warehousing purposes. The company will use ₹4.69 crore to buy transportation vehicles and accessories. The rest of the funds will be for general corporate purposes.

Citichem India supplies organic and inorganic chemicals, food chemicals and bulk drugs to the pharmaceutical industry.

The company is also engaged in the trade of specialty chemicals and intermediates. Such products have diverse applications across industries such as steel, aluminium, textiles, dairy, paper, paints, dyes and intermediates. The company also supplies preservatives and chemicals for the food processing industry.

Citichem India reported a total income of ₹19.6 crore for the financial year ended on March 31, 2024 against ₹20.94 crore in the previous financial year.

Profit after tax was ₹1.11 crore in FY 2023-24 compared to ₹36.26 lakh in FY 2022-23.