Shanti Inorganics IPO announced: ₹42.50 crore issue, what you need to know
- Shanti Inorganics files DRHP for ₹42.50 crore fresh issue.
- Proceeds will fund a new 78,544 MTPA manufacturing facility in Bavla.
- Revenue grew at 25.99% CAGR; PAT grew at 41.35% CAGR (FY24-FY26).
- Top 10 customers contribute 71.03% of revenue; top 10 suppliers account for 97.92% of purchases.
- IPO opens on 31-Aug-2026 and closes on 02-Sep-2026.
*this image is generated using AI for illustrative purposes only.
Shanti Inorganics Limited has filed its Draft Red Herring Prospectus (DRHP) with SEBI for a ₹42.50 crore fresh issue. The Gujarat-based manufacturer of sulphur-based inorganic chemicals aims to fund a major capacity expansion through this offering.
Company Overview
Shanti Inorganics Limited, incorporated in 2010, is a manufacturer and supplier of sulphur-based inorganic chemicals. The company holds one of the largest domestic production capacities for bisulphites at 18,800 MTPA. Its product portfolio includes ammonium bisulphite solution, sodium bisulphite powder/solution, sodium meta bisulphite, and sodium sulphite powder/anhydrous.
These products serve as preservatives, reducing agents, and oxygen scavengers across industries such as food & beverages, chemicals, oil drilling, pharmaceuticals, and water treatment. The company exports to 15 countries, contributing between 29.28% to 53.83% of its revenue. Key certifications include ISO 9001:2015, NSF, KOSHER, HACCP, and HALAL.
Offer Details
- Issue Type: Fresh Issue
- Fresh Issue Size: ₹42.50 Crore
- Offer for Sale (OFS): Not Available
- Price Band: Not Available in DRHP data
- IPO Open Date: 31-Aug-2026
- IPO Close Date: 02-Sep-2026
- Allotment Date: 03-Sep-2026
- Listing Date: 07-Sep-2026
Objects of the Issue
The entire proceeds from the fresh issue will be utilized as follows:
- Capital Expenditure – New Manufacturing Facility at Bavla, Ahmedabad, Gujarat: ₹42.50 Cr. This includes setting up a new facility with an installed capacity of 78,544 MTPA to manufacture sodium meta bisulphite, sodium bisulphite powder/solution, and ammonium bisulphite.
- General Corporate Purposes: Balance Net Proceeds. This covers brand building, marketing, salaries, administration expenses, IT infrastructure upgradation, and other operational costs.
Financial Highlights
The company has demonstrated strong growth over the last three years. Revenue from operations grew at a CAGR of 25.99% from FY2024 to FY2026, while PAT grew at a CAGR of 41.35%.
| Particulars | FY2024 (₹ Cr) | FY2025 (₹ Cr) | FY2026 (₹ Cr) |
|---|---|---|---|
| Revenue from Operations | ₹44.87 Cr | ₹57.11 Cr | ₹71.22 Cr |
| Total Revenue | ₹45.06 Cr | ₹58.46 Cr | ₹72.93 Cr |
| Profit Before Tax (PBT) | ₹6.86 Cr | ₹10.77 Cr | ₹13.83 Cr |
| Total Profit (PAT) | ₹5.12 Cr | ₹7.99 Cr | ₹10.22 Cr |
| Total Assets | ₹52.69 Cr | ₹66.04 Cr | ₹97.04 Cr |
| Total Equity | ₹17.60 Cr | ₹25.60 Cr | ₹48.24 Cr |
Profitability margins have improved consistently, with PAT margins rising from 11.36% in FY2024 to 14.01% in FY2026. Total assets grew by 84.15% from FY2024 to FY2026, reflecting significant capital investment.
Risk Factors
Investors should consider the following material risks disclosed in the DRHP:
- Industry Concentration Risk: Approximately 75.55% of revenue comes from Food & Beverages, Oil Drilling, and Chemical industries.
- Customer Concentration Risk: Top 10 customers account for 71.03% of revenue, with the largest customer contributing 11.23%.
- No Long-Term Contracts: The company relies on purchase orders on a transactional basis, exposing it to demand fluctuations.
- Raw Material Cost Volatility: Cost of materials consumed represented 58.43% of total income for the two months ended May 31, 2026.
- Supplier Concentration: Top 10 suppliers account for 97.92% of purchases, with no long-term supply arrangements.
Valuation & Peer Comparison
Specific peer comparison data and valuation multiples (P/E, P/B) are not available in the provided DRHP extract as the price band has not been declared. However, the company’s post-issue equity is estimated at approximately ₹90.74 Crore (pre-issue equity of ₹48.24 Cr + fresh issue of ₹42.50 Cr). The proposed Bavla facility will increase capacity by approximately 4.18x compared to the current Vatva facility.
Bottom Line
Shanti Inorganics presents a case of strong historical growth and significant capacity expansion. The IPO proceeds are entirely directed towards setting up a new high-capacity facility, rather than promoter exit. However, investors must weigh this against high customer and supplier concentration risks, along with the absence of long-term contracts.
How will the 4.18x capacity expansion at the new Bavla facility impact Shanti Inorganics' market share against established competitors in the sulphur-based chemicals sector?
Given the high concentration of revenue from the Food & Beverage and Oil Drilling industries, how might regulatory shifts or demand fluctuations in these specific sectors affect the company's post-IPO growth trajectory?
What strategies will management employ to mitigate the risk of raw material cost volatility, considering that material costs constitute over 58% of total income?
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