Gandhar Oil Refinery India Limited, a leading manufacturer of white oils and lubricants, is planning to launch its initial public offering (IPO) on November 22, 2023. The Gandhar Oil Refinery IPO will close on November 24, 2023, and the tentative listing date is December 5, 2023. The IPO comprises a fresh issue of equity shares worth Rs 302 crore and an offer for sale (OFS) of 1.18 crore shares by the promoters and existing shareholders.
The total issue size for the Gandhar Oil Refinery IPO is Rs 500 crore, out of which 35% is reserved for retail investors. The price band of the Gandhar Oil Refinery IPO is ₹160 to ₹169 per share. The book-running lead managers of the IPO are Edelweiss Financial Services Ltd and ICICI Securities Limited, and the registrar is Link Intime India Private Ltd. The IPO will be listed on the BSE and NSE.
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Gandhar Oil Refinery IPO Details
|IPO Size||₹ 500.69 Cr|
|IPO Price Range||₹ 160 to ₹ 169|
|Min Investment||₹ 14080|
|Listing Exchange||BSE, NSE|
|Basis of Allotment||30-Nov-23|
|Credit to Demat Account||04-Dec-23|
Gandhar Oil Refinery IPO Dates
|IPO Open Date||Wednesday, November 22, 2023|
|IPO Close Date||Friday, November 24, 2023|
|Basis of Allotment||Thursday, November 30, 2023|
|Initiation of Refunds||Friday, December 1, 2023|
|Credit of Shares to Demat||Monday, December 4, 2023|
|Listing Date||Tuesday, December 5, 2023|
|Cut-off time for UPI mandate confirmation||5 PM on November 24, 2023|
Gandhar Oil Refinery IPO Lot Size
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Gandhar Oil Refinery IPO GMP
The Gandhar Oil IPO GMP aka Grey Market Premium is RS 50.
Gandhar Oil Refinery Company Overview and History
Gandhar Oil Refinery India Limited (GORIL), founded in 1992, specializes in producing white oils for consumer and healthcare sectors. The brand “Divyol” encompasses over 350 products in personal care, healthcare, performance oils, lubricants, and insulating oils. GORIL supplies to various industries such as consumer goods, healthcare, and automotive, partnering with notable companies like Procter & Gamble, Unilever, and Patanjali Ayurved.
The company operates three manufacturing units in Maharashtra, the Union Territory of Silvassa, and Sharjah, UAE, with a significant production capacity. Its network spans over 200 distributors in India and extends to over 100 countries globally.
GORIL’s R&D center in Silvassa is recognized by the Department of Scientific and Industrial Research (DSIR), focusing on product innovation and process efficiency. The company holds various certifications, including ISO 9001:2015 and ISO 14001:2015.
Led by Mr. Ramesh Babulal Parekh and his team, with extensive experience in the petroleum industry, GORIL is committed to quality and customer satisfaction.
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Gandhar Oil Refinery Company financials
The company has shown consistent growth in its revenue and profitability over the past three years. The table below shows the summary of the company’s financial performance for the fiscal year ended March 31, 2022, as compared to the previous two fiscal years:
|Parameter||FY 2020||FY 2021||FY 2022|
|Revenue from Operations||Rs 1,316.76 crore||Rs 1,528.01 crore||Rs 2,078.63 crore|
|EBITDA||Rs 86.64 crore||Rs 108.27 crore||Rs 223.54 crore|
|Profit After Tax||Rs 42.54 crore||Rs 51.67 crore||Rs 108.79 crore|
|EPS||Rs 5.40||Rs 6.55||Rs 13.81|
The company’s revenue from operations grew at a CAGR of 25.77% from FY 2020 to FY 2022, driven by higher sales volume and product mix. The company’s EBITDA and PAT grew at a CAGR of 66.08% and 63.95%, respectively, from FY 2020 to FY 2022, driven by higher operating leverage, improved product margins, and lower finance costs. The company’s EPS grew at a CAGR of 62.69% from FY 2020 to FY 2022, reflecting the company’s enhanced profitability and return on equity.
The company’s balance sheet as of March 31, 2022, shows that the company has a total equity of Rs 258.97 crore and a total debt of Rs 192.18 crore, resulting in a debt-to-equity ratio of 0.74. The company has a net worth of Rs 258.97 crore and a book value per share of Rs 32.88 as of March 31, 2022.
Gandhar Oil Refinery’s competitors
Gandhar Oil Refinery faces competition in a market with several key players:
- Savita Oil Technologies Limited: Specializing in petroleum specialty products like transformer oils, liquid paraffin, white oils, lubricants, and greases, Savita Oil has three manufacturing plants in India and exports to over 30 countries. For FY 2022, the company reported a revenue of Rs 1,646.64 crore and a profit after tax (PAT) of Rs 107.35 crore.
- Panama Petrochem Limited: This company manufactures and exports petroleum specialty products, including white oils, rubber process oils, industrial oils, greases, and waxes. With four manufacturing plants in India, Panama Petrochem’s reach extends to over 50 countries. Their FY 2022 revenue was Rs 1,140.77 crore, and PAT was Rs 57.29 crore.
- Apar Industries Limited: A diversified company, Apar Industries is involved in power transmission conductors, specialty oils, cables, and renewables. Its specialty oils segment produces transformer oils, white oils, liquid paraffin, rubber process oils, lubricants, and greases. Operating four manufacturing plants in India and exporting to over 80 countries, Apar Industries reported a revenue of Rs 6,386.76 crore and a PAT of Rs 174.64 crore for FY 2022.
Gandhar Oil Refinery Growth Prospects
Gandhar Oil Refinery is positioned for growth with several key prospects:
- Increasing Demand for White Oils and Lubricants: With the global white oil market expected to grow from USD 5.4 billion in 2020 to USD 6.1 billion by 2025 (CAGR of 2.5%), and the lubricants market projected to increase from USD 126.5 billion in 2020 to USD 155.6 billion by 2026 (CAGR of 3.5%), Gandhar Oil Refinery stands to benefit significantly. These forecasts, as reported by Research and Markets and Mordor Intelligence, respectively, indicate a rising demand in sectors like consumer goods, healthcare, automotive, industrial machinery, and power equipment. As a leading manufacturer in these segments, the company is well-placed to leverage this demand spike.
- Diversified and Customized Product Portfolio: Gandhar Oil Refinery’s extensive range of products serves a variety of industries and applications. The company’s ability to innovate, coupled with its R&D capabilities, allows for continuous product improvement and customization. This adaptability not only enhances product quality and efficiency but also provides a competitive advantage and value creation for customers and stakeholders.
- Global Presence and Expansion Plans: The company’s strong domestic network of over 200 distributors and dealers, along with its international reach in over 100 countries, positions it favorably for global expansion. Gandhar Oil Refinery’s export markets include Europe, America, Africa, and Asia-Pacific. This extensive global footprint offers significant opportunities for further market penetration and expansion.
SWOT Analysis of Gandhar Oil Refinery Services Limited IPO
Here is a SWOT analysis of Gandhar Oil Refinery Services Limited IPO:
- Leading Position: As a top manufacturer of white oils and lubricants in India, the company benefits from a diverse and customized product range.
- Global Reach: Its strong domestic and international presence is supported by a broad distribution network and customer base.
- R&D Excellence: A dedicated research and development center, recognized by DSIR, and multiple quality certifications and accreditations.
- Experienced Management: The management team and promoters possess significant industry experience, enhancing the company’s strategic and operational capabilities.
- Customer and Supplier Reliance: High dependence on a limited number of customers and suppliers for revenue and raw materials.
- Market Sensitivities: Vulnerability to fluctuations in raw material prices and foreign exchange rates.
- Financial Constraints: The company faces high working capital requirements and has notable debt levels.
- Legal and Regulatory Challenges: Ongoing litigations and pending regulatory approvals could impact operations.
- Market Demand: Growing demand for white oils and lubricants across various industries offers significant growth potential.
- IPO-Driven Expansion: The IPO’s proceeds could enable expansion in production capacity and product offerings.
- Market Expansion: Opportunities to enter new markets and segments through strategic partnerships and alliances.
- Technological Advancement: Adopting new technologies and innovations to improve product quality, performance, and efficiency.
- Competitive Pressure: Intense competition from existing and new market players.
- Regulatory Risks: Potential adverse changes in government policies, regulations, and environmental norms.
- Operational Risks: Threats of operational disruptions from natural disasters, accidents, or unforeseen events.
- Quality and Liability Risks: Risks associated with product liability claims, quality issues, or customer complaints.
This analysis highlights the company’s strong market position and potential growth opportunities, counterbalanced by operational and market challenges.
Review and Recommendation of Gandhar Oil Refinery
Based on a comprehensive analysis of Gandhar Oil Refinery’s business model, financial performance, growth prospects, and SWOT analysis, the recommendation for the Gandhar Oil Refinery IPO is favorable. Here’s a summarized viewpoint:
- Strong Market Position: Gandhar Oil Refinery has established itself as a leader in the white oils and lubricants sector in India.
- Consistent Financial Growth: The company has demonstrated steady growth in revenue and profitability over the past few years.
- Robust R&D and Quality Standards: With a dedicated R&D center and numerous quality certifications, the company is well-equipped to innovate and enhance its products and processes.
- Attractive IPO Pricing: The expected pricing of the IPO appears appealing, potentially offering good value.
- Use of IPO Proceeds: The funds from the IPO are earmarked for capacity expansion and portfolio enhancement, likely boosting the company’s competitive edge and market share.
- Global Presence and Diverse Customer Base: The company’s international operations and varied customer base mitigate risks associated with reliance on a single market or segment.
Risks and Considerations
- The company operates in a highly competitive environment.
- It is subject to fluctuations in raw material prices and exchange rates.
- Regulatory uncertainties and ongoing litigations present potential challenges.
Conclusion Given the company’s solid market standing, growth trajectory, and strategic use of IPO funds, investing in Gandhar Oil Refinery’s IPO could be a worthwhile consideration. However, it’s crucial for investors to conduct their own due diligence and consult financial advisors, as this recommendation is based on current information and does not constitute professional or legal advice.
The potential risks, particularly in terms of market competition and the regulatory landscape, should be weighed against the growth prospects.
Final Thoughts on Gandhar Oil Refinery IPO
Gandhar Oil Refinery India Limited, a prominent manufacturer of white oils and lubricants, stands out in the market with its wide array of products marketed under the brand name “Divyol.” The company’s significant domestic and global reach is supported by an extensive network of over 200 distributors and dealers, and a customer base in over 100 countries.
The company has demonstrated consistent financial growth, maintaining a healthy balance sheet and robust cash flow over the past three years. As it approaches its Gandhar Oil Refinery IPO on November 22, 2023, with a total issue size of Rs 500 crore (including Rs 302 crore as a fresh issue and the remainder as an Offer for Sale by promoters and existing shareholders), the company is poised for further expansion. The IPO proceeds are earmarked for funding these expansion plans and enhancing the product portfolio.
Given the company’s established market position, diverse and quality-focused product range, and promising growth trajectory, the recommendation is to subscribe to the Gandhar Oil Refinery IPO. This investment consideration is based on the company’s strong performance and potential in the white oils and lubricants industry.
However, investors should undertake their own research and consult financial advisors to make informed decisions, considering the inherent risks and dynamics of the market.
FAQs on Gandhar Oil Refinery IPO
Who is the owner of Gandhar Oil Refinery?
Gandhar Oil Refinery is owned by its promoters Ramesh Babulal Parekh, Kailash Parekh, and Gulab Parekh. Key stakeholders also include firms such as Green Desert Real Estate Brokers, Denver Bldg Mat & Décor TR LLC, and Fleet Line Shipping Services LLC, all of whom are divesting their shares.
What is the revenue of Gandhar oil refinery?
Gandhar Oil Refinery’s revenue for the fiscal year 23 was Rs 4,079.4 crore, marking a significant increase from the previous year’s Rs 3,543.3 crore. This demonstrates a robust growth in their operations over the financial period.
What are the dates for the Gandhar Oil Refinery IPO?
The Gandhar Oil Refinery IPO opens on November 22, 2023 and closes on November 24, 2023.
What is the price band for the Gandhar Oil Refinery IPO?
The price band for the Gandhar Oil Refinery IPO is ₹160 to ₹169.