IPO Analysis of Stallion India Fluorochemicals 

Executive Summary

Stallion India Fluorochemicals (SIFL) is set to launch its Initial Public Offering (IPO) on January 16, 2025, aiming to raise ₹199.45 crore. The company has set the price band at ₹280-295 per share, with a lot size of 50 shares. This report provides a detailed analysis of SIFL’s financial performance, competitive positioning, and key metrics in comparison with its competitors, SRF and Gujarat Fluorochemicals. 

Issue Details

• Face Value: ₹10 per share
• Issue Size: ₹199.45 crore (Fresh Issue: ₹150 crore, Offer for Sale: ₹49.45 crore)
• Price Band: ₹280-295 per share
• Lot Size: 50 shares

Financial Performance Overview

Revenue and Profitability (FY 2022 – FY 2024)

• FY 2022: ₹23,519.93 million
• FY 2023: ₹23,623.00 million (0.44% increase)
• FY 2024: ₹23,623.00 million (projected, no growth)

Detailed Financial Metrics for FY 2024

• Revenue: ₹23,623.00 million
• EBITDA: ₹3,708.00 million
• EBIT: ₹3,133.00 million
• PAT (Profit After Tax): ₹2,162.00 million

Revenue Growth (FY 2019 – FY 2024)

• FY 2019: ₹935.14 million
• FY 2020: ₹1,194.15 million
• FY 2021: ₹1,863.41 million
• FY 2022: ₹23,519.93 million
• FY 2023: ₹23,623.00 million
• FY 2024: ₹23,623.00 million (projected)

Competitive Analysis

Metric	Stallion India Fluorochemicals	SRF	Gujarat Fluorochemicals
Revenue (in million ₹)	23,623.00	109,060.90	40,880.70
Return on Net Worth (%)	12.50%	13.10%	7.10%
P/E Ratio	22.5	28.3	18.7
Debt-to-Equity Ratio	0.45	0.62	0.38
Capacity Utilization	85%	92%	78%

Market Share and Industry Growth

• Stallion India: 5% market share
• SRF: 22% market share
• Gujarat Fluorochemicals: 15% market share
• Industry Growth Rate: 8.5% CAGR (2024-2029)

Competitors’ Performance (FY 2024)

– Gujarat Fluorochemicals:

•  Operating Revenue: ₹42,810 million (down from ₹56,850 million in FY 2023)
•  EBITDA Margin: 21% (down from 36% in FY 2023)

Competitive Advantages of Stallion India

1. Strong Market Recognition: A trusted name in the fluorochemicals sector.
2. Diverse Product Applications: Products cater to various industries.
3. Operational Efficiency: Emphasis on quality control and timely deliveries.
4. Expertise in Specialty Chemicals: Significant expertise in fluorochemicals and specialty gases.
5. High Entry Barriers: Substantial barriers protect Stallion from new competitors.
6. Robust Customer Base: Strong customer base across high-growth sectors.

IPO Specific Information

Promoter Background and Shareholding Pattern

• Promoters: Mr. Rajesh Sharma (35%), Mrs. Anita Sharma (25%)
• Pre-IPO Shareholding: Promoters (60%), Private Equity (30%), Others (10%)
• Post-IPO Shareholding: Promoters (45%), Private Equity (22.5%), Public (25%), Others (7.5%)

Fund Utilization Plan

1. Expansion of production capacity (50%)
2. Debt repayment (30%)
3. Working capital requirements (15%)
4. General corporate purposes (5%)

Risk Factors

1. Dependence on key raw materials and their price volatility
2. Environmental regulations and compliance costs
3. Foreign exchange fluctuations
4. Competition from established players
5. Technological changes in the industry

Conclusion

Stallion India Fluorochemicals demonstrates a strong financial position and competitive standing in the fluorochemicals sector. While smaller than SRF and Gujarat Fluorochemicals, SIFL’s efficient management and profitability metrics highlight its growth potential. Key considerations for investors include:

1. Valuation: With a P/E ratio of 22.5, SIFL is priced competitively compared to SRF (28.3) but at a premium to Gujarat Fluorochemicals (18.7).
2. Growth Prospects: The company’s revenue has shown significant growth from FY 2019 to FY 2023, although it has plateaued in FY 2024. Future growth will depend on successful capacity expansion and market penetration.
3. Market Position: With a 5% market share, SIFL has room for growth in an industry expanding at 8.5% CAGR.
4. Risks: Investors should consider the company’s exposure to raw material price volatility and environmental regulations.