Dhariwalcorp Ltd. is a versatile player in the trading industry, dealing in a broad spectrum of waxes, industrial chemicals, and petroleum jelly. The company’s extensive portfolio includes various types of wax such as Paraffin, Micro, Slack, Carnauba, and many more.
They also trade in industrial chemicals like Rubber Process Oil, Light Liquid Paraffin, Citric Acid Monohydrate, and Bitumen. Serving industries from textiles to pharmaceuticals and food processing, Dhariwalcorp is a critical component in many supply chains, ensuring the delivery of quality products both domestically and internationally.
Dhariwalcorp has established a significant presence across India, operating in 21 states and 3 Union territories. The company also initiated its export division, currently supplying products to Nepal. To support its widespread operations, Dhariwalcorp maintains one processing unit and several warehouses in strategic locations such as Jodhpur, Bhiwandi, Ahmedabad, and Mundra. This infrastructure enables the company to ensure timely delivery of products to its diverse customer base.
The company's focus on quality and customer satisfaction is evident in its operations. Dhariwalcorp is committed to delivering products that meet industry standards and continuously seeks ways to improve its offerings and processes. With a dedicated workforce of 7 employees, the company strives to stay ahead of market trends and meet evolving customer demands.
Dhariwalcorp is set to launch its maiden IPO, offering 2,372,400 equity shares at INR 10 each, aiming to raise INR 25.15 crore. The price band for the IPO is set between INR 102 and INR 106 per share. The subscription window opens on August 1, 2024, and closes on August 5, 2024, with a minimum application requirement of 1,200 shares. Post-IPO, the shares will be listed on NSE SME Emerge. The funds raised will be utilized for working capital, warehouse construction, and general corporate purposes.
Over the past three fiscal years, Dhariwalcorp has shown varied financial performance. In FY22, the company reported a total income of INR 159.20 crore with a net profit of INR 1.42 crore. FY23 saw an income rise to INR 195.19 crore but a drop in net profit to INR 0.60 crore. FY24 marked a significant turnaround with an income of INR 231.11 crore and a net profit of INR 4.51 crore. However, this pre-IPO surge in profitability raises questions about its sustainability.
The issue is priced aggressively, with a P/E of 21.07 based on FY24 earnings. The company’s average EPS over the last three years is INR 4.10, with an average Return on Net Worth (RoNW) of 46.07%. The IPO's price-to-book value (P/BV) ratio stands at 7.95 based on the pre-IPO net asset value (NAV) of INR 13.34 and 3.06 based on the post-IPO NAV of INR 34.62.
Dhariwalcorp’s diversified product range and strategic market presence make it a noteworthy player in its industry. However, the inconsistency in its financial performance and the aggressive pricing of the IPO warrant caution. The significant profit increase in FY24, just before the IPO, raises concerns about the sustainability of such growth. Potential investors may consider skipping this high-priced bet, and focusing instead on more stable opportunities.
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