The initial public offering of Snehaa Organics shall open for bidding on Friday, August 29. The company is offering its shares in the range of Rs 115-122 apiece.
The company has fixed lot size in multiples of 1,000 equity shares and multiples thereafter. The issue will conclude for subscription on Tuesday, September 02.
The IPO of Snehaa Organics is entirely a fresh share sale of 26.79 lakh equity shares, amounting to Rs 32.68 crore. Net proceeds from the issue shall be utilized towards working capital requirement, repayment of debt, to meet issue expenses and general corporate purposes.
Incorporated in October 2017, Telangana-based Snehaa Organics operates in solvent recovery, providing sustainable solutions for industries that use solvents. It collects spent solvents and uses distillation and purification technologies to reuse them. It trades solvents directly, sourcing raw materials, assessing quality, and selling in the open market.
Brokerage firms tracking the issue are mostly positive on the suggestion to subscribe to it for a long-term. They are positive on its long-term growth potential, expansion prospects, sustainability theme, demand across various industries, financial track record and reasonable valuations of IPO.
Snehaa Organics has built strong B2B customer relationships across industries including pharmaceuticals, agrochemicals, specialty chemicals, and paints. He emphasized that the company’s established track record, technical expertise, and promoter experience give it a strong competitive edge, said Avinash Gorakshakar from Avinash Mentor Research Services.
“Snehaa Organics is a fully grown recycling solvent player with significant scale and capability. We are confident that Snehaa Organics will deliver consistent performance and provide an excellent investment opportunity for investors with a long-term horizon,” he said with a ‘subscribe for long-term’ rating for the issue.
Retail investors need to apply for a minimum of two lots, or 2,000 equity shares amounting to Rs 2,44,000 and in multiples of 1000 equity shares thereafter. Small HNI investors can apply for 3-8 lots, worth Rs 3,66,000 to Rs 9,76,000. Big HNI investors shall apply for a minimum of 9 lots or 9,000 equity shares worth Rs 10,98,000.
Snehaa has delivered strong performance with revenue rising at a 14.21 per cent CAGR, Ebitda margins improving to 43.52 per cent, and PAT margins expanding to 27.98 per cent. Robust return ratios with RoE at 49.66 per cent and RoCE 50.38 per cent underline its capital efficiency, said Khandwala Securities.
The issue is valued at 11.99 times FY25 earnings and 0.70 times P/BV, significantly below the Chemicals industry average P/E of 50 times. The attractive valuation provides substantial upside potential and valuation comfort, which has led a ‘subscribe’ rating for the issue.
Fast Track Finsec is the sole book running lead manager for the IPO of Snehaa Organics and Skyline Financial Services is the registrar of the issue. The market maker of the company is Nirman Share Brokers, Shares of the company shall be listed on SME platform of NSE.
1,34,000 equity shares have been reserved as the market maker portion. Of the net issue, the company has reserved 1,26,000 equity shares for qualified institutional bidders (QIBs), while non-institutional and retail investors have 45 per cent allocation each the IPO.
Snehaa Organics reported a net profit of Rs 7.34 crore with a revenue of Rs 26.29 crore for the financial year ended on March 31, 2025. The company clocked a net profit of Rs 3.66 crore with a revenue of Rs 23.80 crore for the financial year 2023-24. The company commanding a grey market premium of Rs 34 apiece, suggesting a listing pop of nearly 28 per cent for the investors.