Gujarat Polysol IPO

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Gujarat Polysol IPO Details

Gujarat Polysol Limited IPO
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Why Subscribe to Gujarat Polysol chemicals IPO

Gujarat Polysol Chemicals is amongst the leading chemicals manufacturers for the Infra-tech (Construction), agro, dyes and leather industries in India. It is one of the leading suppliers of dispersing agents in the Infra-tech, dye and pigments, and textile and leather industries and a leading supplier of powder surfactants in India. (Source: Frost & Sullivan Report) Dispersing agents are, typically, surfactants / wetting agents, that are added to a suspension of solid or liquid particles in a liquid (such as a colloid or emulsion) to improve the separation of the particles. It is adsorbed onto the surface of the particles leading to a thin film covering the surface. By adsorbing on newly created surfaces, it reduces interactions and re-agglomeration (clumping) of the particles.

Gujarat Polysol is also amongst the leading manufacturers of poly carboxylate ether (PCE) liquid in India. It is one of the few manufacturers of PCE powder globally and the only manufacturer of PCE powder in India. The vast majority of products that it manufactures use the aromatic organic compounds viz., naphthalene, phenol (carbolic acid), acrylic acid and PEG as the base chemical. The wide range of chemicals and intermediates that it manufactures can be classified, based on the end use industry (Application Industries and each an application industry), as follows:

  • 1. Infra-tech (construction) chemicals
  • 2. Agro chemicals (pesticide formulations)
  • 3. Dyes, pigments and textile chemicals; and
  • 4. Leather chemicals.
Gujarat Polysol manufactures customised products that are tailored to the requirements of customers. The company has 3 Manufacturing Facilities, located in Vapi and Sarigam in Gujarat and a unit located in the Union Territory of Dadra & Nagar Haveli and Daman and Diu. The facilities have an aggregate manufacturing capacity of 130,400 MT per annum.

Objects of the Offer :

The IPO consists of a fresh issue of shares aggregating up to Rs870 mn and an offer for sale aggregating up to Rs3,270 mn by the selling shareholders from the promoter and promoter group. The total IPO size is Rs4,140 mn.
The proceeds from the sale will be utilized for repayment/prepayment of certain borrowings of the company and general corporate purposes.

Gujarat Polysol CHEMICALS IPO Analysis

Consistent track record of financial performance:

The company’s revenues have declined marginally this fiscal, from Rs4,387.58 mn in FY19 to Rs3,796.06 mn in FY21. However, a tight grip on operational costs led to the company’s EBITDA increasing from Rs318 mn in FY19 to Rs643 mn in FY21. The company’s profit jumped from Rs 128 mn in FY19 to Rs 398.39 mn in FY21.

Consolidated Financial Summary Of Gujarat Polysol

(`₹ in Millions) FY21 FY20
Revenue from Operations 3,796.06 4,404.56
Adjusted EBITDA 643 387
EBITDA Margin (%) 16.94% 8.78%
PAT 398.39 201.85
RoNW (%) 32.02% 26.53%
ROCE (%) 27.95% 22.19%
Basic EPS 20.98 15.3

Competitive Strength:

Strong and diversified customer base

Gujarat Polysol Chemicals operates primarily in the Application Industries. One of the key factors that differentiate them from competitors is the company’s customer centric approach. This approach has helped grow its business over the years and established them in the industry. Its successful customer centric approach is reflected in customer accretion and customer retention rate. In the past three years, the company has catered between 596 and 721 customers. It has established long term relationships with various multinational and domestic companies including Ado Additive Technologies Ltd, Agrosyn Impex, Master Builders Solutions India Pvt Ltd, Molecules Conchem Pvt Ltd, Normet India Pvt Ltd, South India Cashew Corporation, Sulphur Mills Pvt Ltd, Chryso India Pvt Ltd, Ecmas Construction Chemicals Pvt Ltd, among others.

In addition, its diversified bouquet of product offerings has enabled them to widen its customer base across application industries, which, in turn, helps them reduce its dependence on a specific industry or sector. It is amongst the leading chemical manufacturers for the Infra-tech, agro-chemical, dyes and leather industries in India. Gujarat Polysol is the only manufacturer of PCE powder in India and among very few manufacturers world over.

It has been in the business of manufacturing diverse chemical products for over 3 decades. Its strength lies in constantly upgrading and diversifying its product offerings. In the past 3 years, it has manufactured different chemical formulations resulting in a product array ranging between 130 products to 202 products.

Strong focus on R&D

Gujarat Polysol invests heavily in R&D for developing or innovating new formulations or products. Its R&D department plays an integral role in the life cycle of a product. In line with its philosophy of being an environmentally conscious and responsible business, the R&D team focuses on creating efficient, sustainable, and eco-friendly products. Generally, its efforts to customize products are driven by customer requirements. Innovations are attempted only after a market survey by the internal team and extensive feedback from its customers and other relevant industry participants. With a view to augment its focus on R&D, it has developed a dedicated in-house R&D facility located at its manufacturing facility in Vapi. The laboratory is equipped with modern equipment and instrumentation which enables them to undertake pharmaceutical gas chromatography and high-performance liquid chromatograph.

With the view to expanding its R&D capabilities, the company has spent over Rs32.90 mn towards R&D expenditure. This has resulted in 17 new products since 2018. The company has also developed different variants of low salt naphthalene products which has a lower pH level and are capable of being manufactured on a lower cost base compared to PCE products. The company is also in the process of developing 12 products across all application industries.

Extensive manufacturing capabilities of products with stringent quality norms and procedures

Gujarat Polysol’s manufacturing facilities are equipped with advanced equipment and modern technology and systems. The company has 3 manufacturing facilities, located in Vapi and Sarigam in Gujarat and a unit located in the Dadra & Nagar Haveli and Daman and Diu.

The company has an aggregate manufacturing capacity of 130,400 MT per annum across 3 manufacturing facilities. The company is continuously looking to adopt newer technology to improve and increase productivity, efficiency, and economies of scale its manufacturing facilities. Further, to cater to growing needs of its clients, the company has consistently increased its manufacturing capacities, in particular, at its largest manufacturing facility at Vapi. The Vapi facility has seen its capacity nearly doubling from 47,760 MT per annum in FY19 to 105,600 MT per annum in FY21. It has also executed an MoU to acquire the assets of M/s. Bhavisha Industries which should increase its manufacturing capacity by 157,200 MT per annum.

It has stringent quality and safety standards and processes at its manufacturing facilities. The quality of its manufacturing facilities is evidenced by the certifications and accreditations such as the ISO standards (9001, 14001, 18001, and 31010) that its facilities has obtained. The company also received certification for ‘Sulphonated Naphthalene Formaldehyde condensate, sodium salt’ from the European Chemicals Agency under Registration, Evaluation, Authorisation and Restriction of Chemicals Regulation (EU REACH Regulation), a regulation of the European Union.

The company has well-defined and documented procedures in place, which begins at sourcing of ingredients and raw materials and extends to safety standards. The company also maintains independent checks at each step of its manufacturing cycle and has a set process for evaluating quality of the product at each stage, as well as unscheduled spot quality checking at its manufacturing facilities. Its quality control processes are also subject to external audits conducted by its domestic and international customers and some of its long-standing customers conduct an annual audit of its manufacturing facilities.


  • The company’s manufacturing facilities are largely located in the western region, thus missing out on opportunities to cater to a wider client base

  • The company has to adhere to certain quality standards and specifications. Any failure to do the same could lead to cancellation of orders and even loss of customers


  • Investing in and expanding its manufacturing capabilities will help drive new lines of revenue

  • Forward integration will help expand the business, with focus on higher value propositions


  • The lack of long-term contracts with clients hampers the company’s ability to build long lasting relationships

  • The business is heavily dependent on raw materials which rely on the commodity cycle. Any fluctuation in prices could prove to be disruptive for the business.

Strategies going forward:

Augmenting production capacity and broadening the footprint of manufacturing operations

Gujarat Polysol has manufacturing facilities across the western part of India. It has been delivering manufactured products to all parts of India and intend to augment and diversify manufacturing operations through organic and inorganic growth. Over the years, it has enhanced its manufacturing capabilities through acquisition. The company also entered into a MoU dated March 2, 2022, to acquire the assets of M/s. Bhavisha Industries including the manufacturing facility located at Vapi, Gujarat. It also has plans of establishing manufacturing operations either in the north-east or the southern coast, of India. The company believes that this will ensure speedier delivery of products to different parts of India and be more cost efficient in terms of logistics on a pan-India basis.

This will also provide them access to norther or southern markets and a path to the ports on India’s eastern and southern coast. Moreover, chemical manufacturing facilities in the north-east and south of India, including those which has been established by the customers based in western India, rely on imported products. Bringing its manufacturing capabilities to these regions will allow the company to establish, and scale-up its presence there. This would also enable them to cater to the demand in these regions by making available domestic products which are cost competitive in comparison to imported products.

Expanding range of operations to include, and increase, ARRAY of finished products

Gujarat Polysol will focus on providing tailor made solutions for its customers. Its R&D team is focused on developing sustainable, environment friendly and customer centric products. Emphasis will be on expanding expertise and adding new verticals. The company intends to broaden and deepen the engagement with its existing customers by offering them products addressing different aspects of its industry. One of its plans include introducing a basket of products for agro-chemicals industry such as adjuvants i.e., auxiliaries that are added to pesticides for enhancing performance of new generation polymeric dispersing agents, eco-friendly wetting agents, etc. Similarly, the company also intend on catering to the Infra-tech industry by introducing high strength polymers for complex structures such as tunnels, bridges and additives for different stages of concreting. Further, the plan also includes introduction of a full bouquet of products catering to its existing range of oil field chemicals.

Augmenting focus on overseas markets

The company intends to increase its sales in the geographic markets where it currently sells products while simultaneously expanding into new geographies. Currently, it has customers in over 18 countries. It has a small percentage of revenue coming from the exports, which it intends to expand going forward. Last year, it exported products to different countries, primarily in Asia and Europe, such as China, Egypt, France, Germany, Indonesia, Kuwait, Philippines, Singapore, South Korea, Sri Lanka, Thailand and the United Arab Emirates.

The company intends to focus its efforts on developing and establishing its presence in select geographies such as Europe, South Africa and, will also seek to enter the US market, in particular, in the oil field chemicals industry where it anticipates greater demand. The company expects the overseas markets to provide them with range of opportunity and better margins.

Cost efficiency

Increased competition and stringent regulations have encouraged the players in chemicals industry to find innovative ways to reduce cost and increase the overall efficiency. Gujarat Polysol intends to focus on keeping its operating costs low, which will enhance profitability. It is implementing measures to reduce its operating costs and improve operational efficiencies. The focus is on continuing to develop sustainable technologies and eco-friendly practices, increase usage of alternative raw material and fuels, and waste utilization technologies, to further improve the quality of products and optimize production costs. It intends to continue further integration of its manufacturing facilities and carry out most of the processes in-house to maximize efficiencies. The emphasis on developing cost-reduction strategies and implementing more sustainable methods in operations will enable the company to maintain its competitive pricing and margins.

Disclaimer -

The content on this page is made available on the basis of the DRHP (draft red herring prospectus ) filed by Gujarat Polysol India Limited. The final content could change based on the Red Herring Prospectus (RHP) filed

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