Neochem Bio NSE SME IPO review (Not Rated)

•    The company is engaged in the manufacturing and marketing of specialty performance chemicals with a diverse portfolio of 350+ customized formulations.
•    The company marked growth in its top and bottom lines. The surge in bottom line was due to value added high margin products.
•    It is poised for bright prospects ahead with vide range of products offering.
•    It has wide list of end users with long term  relationship, that augurs well.
•    Investors may park funds for medium to long term.

ABOUT COMPANY:
Neochem Bio Solutions Ltd. (NBSL) is a specialty performance chemical company with a legacy of over four decades, engaged in the business of manufacturing specialty performance chemicals with a diverse portfolio of over 350 customized formulations across four primary product segments viz., (i) Polymers, (ii) Surfactants, (iii) Silicones, and (iv) Esters & biobased sustainable solutions. Its products are essential and used in industries such as textile & garment washing, home & personal care (HPC), institutional and industrial cleaners, water treatment, paints and coatings, paper and pulp, construction, rubber and dyes and pigments. 

The Company is accredited with recognized process certifications such as ISO 9001:2015, ISO 14001 and ISO 45001. Its product certifications include ZDHC Level 3 and GOTS 7.0. The company offers a comprehensive range of textile and garment washing auxiliaries such as pre-treatment, dyeing, finishing, printing and coating applications across all fabric and garment substrates compatible with various processing machines. It manufactures and supplies a diverse range of specialty performance chemicals such as dispersant polymers, anti-foams, specialty surfactants, silicone emulsions, and rheological modifiers for the home and personal care industries. Its water treatment range includes anti-scalant formulations based on high and low molecular weight polymers, along with dispersants, anti-foams, de-colorants and flocculants.

For the paint and coating industry, it offers acrylic dispersants, wax emulsion-based additives, anti-foams, and acrylic emulsions. Further, its institutional and industrial cleaning range includes room care, laundry care, kitchen hygiene, and personal hygiene solutions tailored for commercial and industrial use. Its manufacturing facility is located at Saket Industrial Estate, Village Moraiya, Ta. Sanand, Dist-Ahmedabad, which has an installed capacity of 22,000 metric ton per annum (“MTPA”) with a total area of 6,763 square meters. This facility is partially automated and designed for production of small to medium batches with the capability to handle both liquid and powder-based chemistries. The facility is supported by warehousing capacity to store approximately 1,350MT of raw materials and finished goods at a time.

Its formulation and product application development initiatives are supported by a dedicated in-house research & development laboratory, and an application research center equipped with advanced testing capabilities and operated by a team of qualified professional including support staff. Its initiatives are directed towards advancing sustainability through the development of bio-based products tailored to meet specific customer requirements. The company sells its products directly to customers as well as through more than 50 pan India authorized distributors and its reselling agent, in the domestic markets and directly to customers across international market. In the domestic market, it sold products to 228, 227, 254 and 188 customers during six months period ended September 30, 2025, Fiscal 2025, Fiscal 2024 and Fiscal 2023, respectively. As of September 30, 2025, it had 64 employees on its payroll.

ISSUE DETAILS/ CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 4588800 equity shares of Rs. 10 each to mobilize Rs. 44.97 cr. at the upper cap. The company has announced a price band of Rs. 93 – Rs. 98 per share. The minimum application to be made is for 2400 shares and in multiples of 1200 shares thereon, thereafter. The issue opens for subscription on December 02, 2025, and will close on December 04, 2025. The IPO constitute 26.80% of the post-IPO paid-up capital of the company. The shares will be listed on NSE SME Emerge. From the net proceeds of the IPO, it will utilize Rs. 23.90 cr. for working capital, Rs. 10.00 cr. for repayment/prepayment of certain borrowings, and the rest for general corporate purposes. 

The IPO is solely lead managed by Vivro Financial Services Pvt. Ltd., and MUFG Intime India Pvt. Ltd. is the registrar to the issue. Rikhav Securities Ltd. is the market maker. Vivro Financial is also a syndicate member.

Having issued initial equity capital at par, the company issued further equity shares in the price range of Rs. 13 – Rs. 144 per share between March 2023 and June 2025. It has also issued bonus shares in the ratio of 2 for 1 in March 2022, and 3 for 4 in July 2025. The average cost of acquisition of shares by the promoters is Rs. 2.52, and Rs. 6.00 per share.

Post-IPO, company’s current paid-up equity capital of Rs. 12.53 cr. (12531953 equity shares) will stand enhanced to Rs. 17.12 cr. (17120753 equity shares). Based on the upper band of the IPO pricing, the company is looking for a market cap of Rs. 167.78 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has (on a consolidated basis) posted total income / net profit, of Rs. 48.79 cr. / Rs. 1.07 cr. (FY23), Rs. 62.01 cr. / Rs. 1.80 cr. (FY24), Rs. 86.15 cr. / Rs. 7.75 cr. (FY25). For H1 of FY26 ended on September 30, 2025, it earned a net profit of Rs. 5.48 cr. on a total income of Rs. 47.18 cr. With more value added and innovative products the management is confident of maintaining the current trends. It has marquee customers with regular inflow of orders with rising quantum.

For the last three fiscals, the company has reported an average EPS of Rs. 4.29, and an average RoNW of 33.41%. The issue is priced at a P/BV of 3.81 based on its NAV of Rs. 25.72 per share as of September 30, 2025, and at a P/BV of 2.17 based on its post-IPO NAV of Rs. 45.10 per share (at the upper cap).

If we attribute FY26 annualized super earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 15.29, and based on FY25 earnings, the P/E stands at 21.63. The IPO appears to be fully priced. 

For the reported periods, the company has posted PAT margins of 2.20% (FY23), 2.91% (FY24), 9.00% (FY25), 11.62% (H1-FY26), and RoCE margins of 17.46%, 21.46%, 41.67%, 22.84%, respectively for the referred periods.

DIVIDEND POLICY:
The company has not paid any dividends for the reported periods. It will adopt a prudent dividend policy, based on its financial performance and future prospects. 

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown Rossari Biotech, Indian Emulsifiers, as its listed peers. They are currently trading at a P/E of 24.4, and 11.6 (as of November 27, 2025). However, they are not truly comparable on an apple-to-apple basis. This comparison appears to be an eyewash.

MERCHANT BANKER’S TRACL RECORD:
This is the 10th mandate from Vivro Financial in the last three fiscals. Out of the last 9 listings, 2 opened at discount and the rest with premium ranging from 26.80% to 99.46% on the listing date.