IPOs | Latest IPOs News | Upcoming IPOs | Stallion India Fluorochemicals Limited | IPO advise | IPO call | IPO recommendation | IPO allotment Status| Financials | Shareholding

Industry : Chemicals

Stallion India Fluorochemicals Limited View all IPOs

Price Band

Rs 85 – Rs 90

Stallion India Fluorochemicals Limited is going public with a fresh issue an offer for sale. The issue opens on 16th January 2025.

MOJO CALL

Why

Avoid

MOJO CALL

Avoid

Neutral

High threat from Chinese competitors

The company relies heavily on the sale of refrigerant gases, which contributed 87% of its total sales in the first half of FY2025. However, it faces significant competition from Chinese suppliers who offer these gases at lower prices, posing a substantial threat to its business. Additionally, the company sources most of its raw material gases from China, which accounted for 93% of its supply during the first half of FY2024. Any changes in the regulations or trade policies affecting these gases could adversely impact the company's financial performance.

High concentration of clients

The company depends significantly on its key customers for a large portion of its revenue. In H1 FY2025, the top two clients contributed 31% of total revenue, while the top five and top ten customers accounted for 59% and 77%, respectively. Moreover, the company relies on blanket orders from its clients without any long-term agreements, creating uncertainty in forecasting future revenues.

Strong relation with existing customers

The company has established strong relationships with its key customers, maintaining an average partnership of 6-7 years with its top five customers and 3-4 years with its top ten customers.

Valuations

Based on the annualized FY2025 financials, the company is seeking a P/E of 21.5x and a market cap-to-sales ratio of 2.5x. These valuations are fairly low compared to other established peers in the market. The company lacks value addition in the fluorochemicals business and hence, we recommend avoiding the issue.

Issue Details

Issue Opens	16th January 2025
Issue Closes	20th January 2025
Price Band	Rs 85 – Rs 90
Issue size (Upper Band)	Rs. 199.45 Cr
Issue Type	FRESH ISSUE & OFFER FOR SALE
Market cap (based on upper band)	Rs. 713.93 Cr
Sales- March 2024 (Rs./Crs)	233.24 Cr
Net Profit - March 2024 (Rs./Crs)	14.79 Cr
Industry	Chemicals
Promoters	SHAZAD SHERIAR RUSTOMJI, MANIHSA SHAZAD RUSTOMJI & ROHAN SHAZAD RUSTOMJI
Lead Manager	Sarthi Capital Advisors

Objective of the Issue

Details

Objectives of the Issue Fresh Issue – Rs 160.73 cr & Offer for sale – Rs 38.72 cr

The Objectives of the Offer are for:
1. Funding incremental working capital requirements of the company – Rs 95 crore
2. Funding capital expenditure requirements for the Semi-conductor & Specialty Gas debulking & blending facility – Rs 29.16 crore
3. Funding capital expenditure requirements for the Refrigerant debulking & blending facility - Rs 21.18 crore
4. General corporate purposes – Rs 15.39 crore

List of Shareholders Selling Their Stake

Name	Type	Value of Shares (in Rs)	% of OFS
Shazad Sheriar Rustomji	Promoter	38,72,39,040	100%

Business Operations

About Company

Stallion India Fluorochemicals is engaged in the business of debulking, blending and processing of Refrigerant and Industrial gases including HC, HFC (hydrofluorocarbon) and HFO (hydrofluoroolefin) gases.

The company’s product portfolio includes refrigerants/gases such as R32, R152a, R410a, and SF6.

The company’s products find use in various industries such as Air conditioners & Refrigerators, Fire Fighting, Semiconductor manufacturing, Automobile Manufacturing, Pharma and Medicals, Glass bottle manufacturing, etc. and a few others.

The company operates four manufacturing facilities each located in Khalapur (Maharashtra), Ghiloth (Rajasthan), Manesar (Haryana) and Panvel (Maharashtra). The company had a total installed capacity of 28,800 MT.

Segment Revenue Breakup

Revenue Breakdown by Segment:
Segment	H1 FY2025	FY2024	FY2023	FY2022
Refrigerants	87%	82%	84%	96%
Other Industrial Gases	13%	18%	16%	4%

Financials

Financial Overview

The company’s revenue grew by 25% between FY2022 and FY2024 and stood at Rs 233 crore for FY2024. For H1FY2025, the revenues stood at Rs 140.7 crore.

In FY2024, the company’s Return on Net Worth stood at 12.54%, down up from 13.79% and 34.64% recorded in FY2023 and FY2022, respectively.

For H1 FY2025, operating margins for the company stood at 18.04%, up from 11.3% and 6.9% recorded in FY2024 and FY2023, respectively.

Consequently, profit margins for H1 FY2025 stood at 11.7%, up from 6.26% and 4.31% recorded in FY2024 and FY2023, respectively.

The company has failed to generate positive cash flow from operations for the past 3 years. The company reported a negative CFO of Rs 73.45 crore in FY2024. For H1 FY2025, company generated a negative CFO of Rs 4 crore.

As of 30th September 2024, the company had debt (incl. lease liabilities) of Rs 81 crore.

Financial Performance (Rs/crore)

Rs./Crs	H1 FY25	FY 24	FY 23	FY 22
Revenue	140.73	233.24	225.50	185.88
Net Profit	16.57	14.79	9.75	21.11