Sigachi Industries Limited IPO Details

Sigachi IPO: Key Details

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Company Information

Sigachi Industries Limited, incorporated in 1989, is engaged in manufacturing microcrystalline cellulose (“MCC”) which is widely used as an excipient for finished dosages in the pharmaceutical industry. They operate three manufacturing units namely Unit I situated at Hyderabad and two manufacturing units, Unit II and Unit III are situated at Jhagadia and Dahej, respectively located in Gujarat.

• Unit I manufactures both HiCel and AceCel and caters to the domestic and international customers such as end users, merchants, distributors and exporters.
• Unit II manufactures AceCel and supplements the sale in the domestic market.
• Unit III is situated at Special Economic Zone (“SEZ”) at Dahej and is engaged in the manufacture of HiCel and special grades which is exported to overseas customers and distributors

Competitive Strengths

• One of the leading manufacturers of MCC (cellulose-based excipient) in India with over 30 years experience.
• Pan India and International market presence
• Well experienced management team with proven project management and implementation skills.
• Comprehensive product portfolio enables us to serve diverse end-use applications
• Presence across diverse industry verticals with long standing relationship with customers.
• Growth led by continuous investment and focus on R&D
• Quality Assurance and Quality Control of products.
• Strategically located manufacturing facilities

Company Strategy

• Increasing manufacturing capacity to focus on the growing demand of core products
• Increasing focus on core business segment
• Diversifying and increasing penetration in markets
• Increasing Global presence
• Strengthen marketing network

Proceeds from Sigachi IPO will be used to:

• Funding capital expenditure:
  • for expansion of production capacity for microcrystalline cellulose (“MCC”) at Dahej, Gujarat;
  • for expansion of production capacity for microcrystalline cellulose (“MCC”) at Jhagadia, Gujarat; and
  • to manufacture Croscarmellose Sodium (“CCS”), a modified cellulose used as excipient at Kurnool, Andhra Pradesh
• General Corporate Purposes

Sigachi IPO: Financials

Sigachi IPO: Comparison with listed industry peers

As per RHP, there are no listed companies in India whose business portfolio is comparable with that of Fino Payment’s business and comparable to the scale of its operations.

Sigachi IPO: Risks

• The company is reliant on the demand from the pharmaceutical industry for a significant portion of the
  revenue.
• Highly depend on major raw materials and a few key suppliers who help to procure the same
• Dependent on a few customers for a significant portion of the revenue, and any decrease
  in revenues or sales from anyone may adversely affect the business
• The company has experienced negative cash flow in the past and may continue to do so in the future
• They may face several risks associated with the proposed expansion of existing manufacturing facilities

For complete internal and external risk factors, you can refer to the RHP of the company.

Sigachi IPO: Registrar and Lead Managers