Allchem Lifescience, a Gujarat-based manufacturer specializing in active pharmaceutical ingredient (API) intermediates and specialty chemicals, has filed draft documents with the Securities and Exchange Board of India (SEBI) seeking approval for an initial public offering (IPO).
Invest in Indian Markets and Unlock Future Potential With 5paisa!IPO Details
The IPO comprises a fresh issue of equity shares worth up to ₹190 crore, coupled with an offer for sale (OFS) of 71.55 lakh equity shares by the company’s promoters, Kantilal Ramanlal Patel and Manisha Bipin Patel.
From the proceeds of the fresh issue, ₹130 crore will be directed toward repaying outstanding debts, while the remaining funds will be utilized for general corporate purposes and supporting the company’s business expansion strategies.
Emkay Global Financial Services has been appointed as the sole book-running lead manager for the offering, overseeing the IPO process and investor outreach.
Company Overview and Business Operations
Established in 2017, Allchem Lifescience has carved out a niche in the API intermediates and specialty chemicals segment, developing the capability to manufacture 263 products. The company specializes in synthesizing complex organic compounds through advanced chemical processes.
A key focus area for Allchem Lifescience is the production of piperazine derivatives—crucial intermediates in API manufacturing. These derivatives play a significant role in the formulation of drugs such as quetiapine, which is used for treating mental health conditions like schizophrenia and bipolar disorder.
The company operates a state-of-the-art manufacturing facility in Vadodara, Gujarat, ensuring high-quality production standards. By leveraging its robust research and development (R&D) capabilities, Allchem has expanded its product portfolio to cater to both domestic and international pharmaceutical companies.
Prominent clients of Allchem Lifescience include leading pharmaceutical firms such as Alembic Pharmaceuticals, Indoco Remedies, and Neuland Laboratories. These partnerships underscore the company’s credibility and ability to meet stringent quality standards in the industry.
Financial Performance and Growth Prospects
Financially, Allchem Lifescience has demonstrated steady growth. The company’s revenue from operations recorded a compound annual growth rate (CAGR) of 12.75% between FY22 and FY24, reflecting strong demand for its products.
For the six-month period ending September 30, 2024, Allchem reported revenue of ₹7.84 crore. Meanwhile, its profit after tax (PAT) grew at a CAGR of 28.65% between March 31, 2022, and March 31, 2024, reaching ₹1.09 crore for the half-year ending September 2024.
The pharmaceutical and specialty chemicals industries have witnessed robust expansion in recent years, driven by rising healthcare needs, increasing prevalence of chronic diseases, and growing demand for high-quality drug formulations. With the global pharmaceutical sector experiencing steady growth, the demand for reliable API intermediates is also on the rise.
As India continues to strengthen its position as a key player in the global pharmaceutical supply chain, Allchem Lifescience is well-positioned to capitalize on emerging opportunities. The company’s focus on innovation, process optimization, and client-centric solutions gives it a competitive edge in the market.
Future Strategy and Market Outlook
Looking ahead, Allchem Lifescience aims to leverage its IPO proceeds to accelerate business expansion and enhance production capabilities. By reducing its debt burden, the company intends to improve its financial stability, allowing for greater investments in research, new product development, and facility upgrades.
Additionally, the company is exploring opportunities to expand its export footprint by strengthening relationships with international pharmaceutical manufacturers. The global API intermediates market is projected to witness significant growth, and Allchem’s strategic expansion plans could help capture a larger market share.
Moreover, sustainability and compliance with stringent regulatory norms remain a priority for the company. By adhering to Good Manufacturing Practices (GMP) and international quality standards, Allchem Lifescience ensures that its products meet the safety and efficacy requirements of regulatory agencies worldwide.
With a strong foundation in API intermediates, a growing client base, and a well-defined growth strategy, Allchem Lifescience is poised to benefit from industry tailwinds. The upcoming IPO marks a crucial step in the company’s journey, providing the necessary capital to fuel its long-term aspirations and strengthen its market position.
