Courtesy: https://www.chittorgarh.com/
Review By Dilip Davda on September 30, 2025
- The company is engaged in the manufacturing of specialty chemicals having high value/low volume.
• It posted declined profits on higher top line for FY25 raising concern.
• The company is operating in a highly competitive and fragmented segment.
• Based on its market price and recent financial data, the issue appears greedily priced.
• Well-informed investors may park moderate funds for long term.
ABOUT COMPANY:
Sunshield Chemicals Ltd. (SCL) is engaged in the manufacturing of specialty chemicals, which comprise of low volume high value chemicals with specific applications, that constitute a part of the Indian chemical industry and are targeted towards specific end-use applications. They are produced by an interdependent industry and comprise of products that are sold based on their performance and function, rather than their composition. The offer document is silent on its employees’ strength/
ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 1441776 equity shares of Re. 10 each at a fixed price of Rs. 901 per share to mobilize Rs. 129.90 cr. The RI opens for subscription on September 30, 2025, and will close on October 24, 2025. The company is offering RI in the ratio of 10 for 51 to its eligible stakeholders as of the record date of September 24, 2025. The company is asking for full money on application for the number of shares applied. Post allotment, RI shares will be listed on BSE. The company is spending Rs. 1.41 cr. for this RI process, and from the net proceeds, it will utilize Rs. 97.64 cr. for repayment/prepayment of certain borrowings, and Rs. 30.85 cr. for general corporate purposes.
The RI is self-managed by the company itself, and Bigshare Services Pvt. Ltd. is the registrar to the issue. Fortress Capital Management Services Pvt. Ltd. is the advisor to the issue.
Post-RI, company’s current paid-up equity capital of Rs. 7.35 cr. will stand enhanced to Rs. 8.79 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 792.41 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has (on a consolidated basis) posted total income / net profit, of Rs. 284.86 cr. / Rs. 18.85 cr. (FY24), and Rs. 368.94 cr. / Rs. 14.58 cr. (FY25).
For Q1 of FY26 ended on June 30, 2025, (on unaudited basis) it marked net profit of Rs. 1.53 cr. on a total income of Rs. 18.33. Its NAV stood at Rs. 2.83 as of June 30, 2025.
DIVIDEND POLICY:
The company has paid a dividend of 24% for FY24 and 25% for FY25. It will adopt a prudent dividend policy, based on its financial performance and future prospects. However, offer document is silent on its dividend policy.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 530845 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 981.50 on September 23, 2025, and opened on an ex-right basis at Rs. 980.00 on September 24, 2025. Since then, it has marked a high/low of Rs. 989.00 / Rs. 900.00. The scrip last closed at Rs. 912.50 as of September 30, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 1138.01 / Rs. 583.47.
The promoters’ holding has been at 64.45% for the last two quarters ended with June 30, 2025. RI is at a small discount of around 12.60% based on its last traded price of Rs. 912.50 as of September 30, 2025. The counter is well maintained above the RI price to tempt investors.
Conclusion / Investment Strategy
SCL is engaged in the manufacturing of specialty chemicals having high value/low volume. It posted declined profits on higher top line for FY25 raising concern. The company is operating in a highly competitive and fragmented segment. Based on its market price and recent financial data, the issue appears greedily priced. Well-informed investors may park moderate funds for long term.
Review By Dilip Davda on September 30, 2025
Review Author
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detailed fundamental and financial analysis of companies coming up with IPOs helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
Courtesy: https://www.chittorgarh.com/
