Prasol Chemicals IPO

Strengths · 8

• 01Profit has grown more than four times in two years, from Rs 18.13 crore in FY2024 to Rs 43.57 crore in FY2025 and Rs 83.12 crore in FY2026.
• 02Sales have grown steadily, from Rs 887.56 crore in FY2024 to Rs 1,015.54 crore in FY2025 and Rs 1,237.85 crore in FY2026.
• 03EBITDA more than doubled over the same period, from Rs 60.53 crore to Rs 139.32 crore.
• 04The product range is very wide at more than 150 chemicals, spread across five different end industries, so it does not depend on one sector.
• 05The customer base is large and reputed, with about 1,600 customers including Alembic Pharmaceuticals, Lubrizol India, Rossari Biotech, Clean Science and Croda India.
• 06It exports to 69 countries and is certified as a 3 Star Export House, with distribution across Asia Pacific, the Americas and Europe.
• 07It has a long record of more than 30 years and two plants with a combined capacity of 98,644 tonnes a year.
• 08RoCE was 22.43% and RoNW was 18.53% in FY2026.

Risks · 8

• 01The P/E and EPS are not stated in the data available to us, so the issue cannot be compared with chemical peers on earnings from here.
• 02The profit margin is thin at 6.74%, which is low for a company describing itself as a specialty chemicals maker.
• 03Very little of the money is going into the business. Only Rs 60 crore of the Rs 500 crore issue is earmarked for repaying borrowings, with the rest to general corporate purposes and to the selling shareholders.
• 04Borrowing has gone up every year, from Rs 82.07 crore in FY2024 to Rs 101.05 crore in FY2025 and Rs 110.06 crore in FY2026.
• 05Raw material prices drive this business. Acetone and phosphorus feedstock are linked to crude and to global chemical cycles, and a sharp rise cannot always be passed on.
• 06Both plants are in Maharashtra, at Khopoli and Mahad, so there is regional concentration, and chemical plants carry pollution control and environmental compliance risk.
• 07Exporting to 69 countries brings currency risk and exposure to anti-dumping duties and trade rules in those markets.
• 08This is a fresh issue combined with an offer for sale, and promoter holding falls from 89.2% to 77.51% after the issue.

Prasol Chemicals was started in 1992 and works in the specialty chemicals industry. Specialty chemicals are made in smaller quantities for a specific use, unlike bulk commodity chemicals.

The company makes more than 150 different specialty chemicals. Its range covers 21 acetone based chemicals, 53 phosphorous based chemicals and 76 other products such as surfactants, esters and acids.

These products go into five main industries. These are performance chemicals such as lubricant and mining additives, the group known as PICA which covers paint, inks, construction and adhesives, pharmaceuticals, agrochemicals, and home and personal care. Its customers include Alembic Pharmaceuticals, Lubrizol India, Rossari Biotech, Clean Science, Gharda Chemicals, Croda India, Supriya Lifescience and Yasho Industries. As on 31 July 2026 it served about 1,600 customers and exported to 69 countries, and it is certified as a 3 Star Export House by the Government of India. It runs two plants, at Khopoli covering 1,20,604 square metres and at Mahad covering 1,19,423 square metres, with a combined capacity of 98,644 tonnes a year.

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