Phychem Technologies Ltd. IPO

Phychem Technologies Limited was incorporated in 2013 and is engaged in manufacturing rotational moulding, or roto moulding, compounds. These compounds are used as key raw materials for manufacturing hollow plastic products through the rotational moulding process. The company's products are primarily customised polyethylene-based compounds formulated using LLDPE, HDPE and specialised additives. They are supplied in powder and granulated forms.

The company's products are used in the production of water tanks, fuel and chemical storage tanks, portable sanitation units, furniture, industrial containers, automotive components and other customised hollow plastic products. In addition to manufacturing, Phychem Technologies undertakes custom-moulded tank production and job-work activities such as rotolining and toll pulverising.

The company also has a trading and distribution business connected with the rotational moulding industry. Its distributed products include paints and coatings, polypropylene compounds, specialty release agents, process-control equipment, plastic welding machines and ancillary tools sourced from international suppliers.

Phychem Technologies operates its manufacturing facility at Gat No. 172, Khatwad, Dindori, Nashik, Maharashtra. The facility includes manufacturing machinery, an in-house laboratory and quality-control infrastructure. The company operates three fully functional rotational moulding machines at the facility.

The manufacturing process involves blending, pelletising and pulverisation, followed by quality checks designed to maintain uniform particle size, melt flow and product performance. The company offers several specialised products such as colour powders, stone-effect compounds, PE foam compounds, flame-retardant compounds and permanent antistatic compounds.

Colour powders were the largest product category in FY2026, contributing approximately 45.55% of sales. Stone-effect compounds contributed about 23.05%, while PE foam compounds contributed around 15.25%. The remaining revenue came from other specialised compounds and related activities.

The company serves customers across several industries, including building and construction, water management, agriculture, automotive, marine, furniture, toys, chemicals, sewage and waste processing and railways. This broad application base allows the company to participate in multiple end-use markets rather than relying on a single application.

During FY2026, the company served approximately 265 domestic customers and 24 global customers. It also received repeat orders from around 142 customers during the preceding three years. This indicates that the company has developed an established customer network in the roto moulding industry.

Phychem Technologies has an international presence and exports its products to several countries, including Bahrain, Bangladesh, Iraq, Kuwait, Nigeria, Saudi Arabia, South Africa, Thailand, Turkey and the UAE. Export revenue contributed approximately 23.32% of revenue from operations in FY2026.

Domestic sales remained the larger contributor to revenue, accounting for approximately 76.68% of revenue from operations in FY2026. Maharashtra alone contributed around 54.60%, making the state an important market for the company.

The company has increased its installed capacity for roto moulding compounds over the years. Its installed capacity reached approximately 6,000 metric tonnes per annum in FY2026, compared with around 4,100 metric tonnes in FY2024. Capacity utilisation for roto moulding compounds was approximately 65.45% in FY2026.

The company also has custom-moulded tank capacity of around 2,000 tanks per annum, with utilisation of approximately 91.45% in FY2026. This provides an additional revenue stream alongside the core compound manufacturing business.

Phychem Technologies has an ISO 9001:2015 certification and follows quality-control systems at its manufacturing facility. It has also been recognised as a One Star Export House. The company states that it maintains a focus on quality, environment, health and safety.

The company's financial performance has improved over the reported periods. Revenue increased from ₹47.59 Cr in FY2024 to ₹51.11 Cr in FY2025 and ₹57.48 Cr in FY2026. PAT increased from ₹1.69 Cr in FY2024 to ₹2.84 Cr in FY2025 and ₹4.09 Cr in FY2026.

EBITDA increased from ₹2.76 Cr in FY2024 to ₹4.37 Cr in FY2025 and ₹6.09 Cr in FY2026. The EBITDA margin increased to 10.78% in FY2026 from the lower levels reported in FY2024 and FY2025.

Net worth increased from ₹6.86 Cr in FY2024 to ₹9.70 Cr in FY2025 and ₹13.79 Cr in FY2026. Total assets increased from ₹17.83 Cr in FY2024 to ₹20.75 Cr in FY2025 and ₹25.32 Cr in FY2026.

The company has maintained relatively moderate leverage. Total borrowings stood at ₹5.91 Cr as of 31 March 2026, compared with ₹4.59 Cr in FY2025 and ₹5.61 Cr in FY2024. The FY2026 debt-to-equity ratio was approximately 0.43.

The IPO is a fresh issue, meaning the company will receive the proceeds raised from the issue. There is no Offer for Sale component. The total issue comprises 27,00,000 equity shares aggregating up to ₹14.58 Cr at the upper price band of ₹54 per share.

Of the total issue, 1,38,000 shares are reserved for the Market Maker and the remaining 25,62,000 shares constitute the net offer to the public. The fresh issue excluding the Market Maker reservation amounts to approximately ₹13.83 Cr at the upper price band.

The company intends to use the IPO proceeds for repayment of outstanding borrowings, purchase of plant and machinery, working-capital requirements and general corporate purposes. The stated objects are therefore focused on strengthening the balance sheet and supporting manufacturing capacity.

The company has a relatively small employee base, with 33 permanent employees reported as of 30 June 2026. Its operations therefore depend significantly on the efficiency of its existing manufacturing infrastructure, management team and specialised workforce.

Phychem Technologies' business is closely connected to the plastic-processing and polymer industry. Demand for its compounds depends on manufacturers of water tanks, industrial containers, furniture, automotive components, sanitation products and other roto-moulded products.

The company's business model benefits from customisation. Roto moulding customers often require compounds with specific colours, physical characteristics and performance properties. Phychem Technologies' product range allows it to provide customised compounds for different applications.

At the same time, polymer-based manufacturing is sensitive to the prices and availability of raw materials. Changes in polyethylene and other input costs can affect production costs and margins, particularly if the company is unable to pass higher costs on to customers.

The company's geographical concentration is another factor to consider. Maharashtra contributed more than half of FY2026 revenue from operations, while the top 10 customers accounted for 52.99% of revenue. One customer alone contributed approximately 15.73% of FY2026 revenue.

The supplier side also has concentration risk. The largest supplier accounted for approximately 62.60% of purchases in FY2026. A disruption involving this supplier or a significant increase in procurement prices could affect production and profitability.

The company operates from a single manufacturing facility in Nashik. Any major equipment failure, natural event, labour disruption, regulatory issue or other operational problem affecting the facility could interrupt production and adversely affect financial performance.

Phychem Technologies operates in a specialised segment of the plastic-processing industry by manufacturing rotational moulding compounds used in the production of hollow plastic products. Its products cater to applications across construction, water management, agriculture, automotive, marine, furniture, toys, chemicals, sewage treatment and railway industries.

The company has developed a combination of manufacturing, customised product development and distribution activities. Its customer base covers domestic and international markets, with exports accounting for approximately 23.32% of FY2026 revenue from operations.

Financial performance has been encouraging. Revenue increased from ₹47.59 Cr in FY2024 to ₹57.48 Cr in FY2026, while PAT increased from ₹1.69 Cr to ₹4.09 Cr over the same period. EBITDA also increased from ₹2.76 Cr to ₹6.09 Cr.

The company has also maintained a moderate debt position relative to its equity base. Its FY2026 debt-to-equity ratio was approximately 0.43, while RoNW was 29.66% and RoCE was 32.73%.

The IPO valuation is based on a pre-issue EPS of ₹5.42 and post-issue EPS of ₹3.99. At the upper price band of ₹54, the pre-issue P/E is approximately 9.96x and the post-issue P/E is approximately 13.53x.

The IPO also brings certain concerns. The company's largest supplier accounted for 62.60% of purchases in FY2026, while its top 10 customers contributed 52.99% of revenue. Such concentration can create operational and revenue risks if supplier terms change or major customers reduce their orders.

The company's operations are concentrated at one manufacturing facility in Nashik. A significant interruption at this facility could therefore have a direct impact on production and business continuity.

The company's dependence on Maharashtra is another factor to monitor. Although exports and customers across other regions provide some diversification, Maharashtra still represented 54.60% of FY2026 revenue from operations.

Overall, Phychem Technologies offers exposure to a specialised manufacturing business with improving revenue and profitability, diversified product applications, export operations and an established customer base. The IPO valuation appears moderate based on the reported P/E ratios. However, investors should consider supplier concentration, customer concentration, raw-material price volatility, single-facility dependence and SME-market liquidity before making an investment decision.

Listing Performance

Phychem Technologies IPO has not yet listed as of 2 September 2026. The shares are scheduled to list on the BSE SME platform on 7 September 2026. Therefore, no actual listing price or listing gain/loss should be reported at this stage.

Phychem Technologies IPO applications can be made through ASBA and UPI mechanisms during the IPO bidding period. The minimum retail application is 4,000 shares, or 2 lots, requiring ₹2,16,000 at the upper price band of ₹54.

Through UPI

1. Log in to your stockbroker app or website.
2. Open the IPO section.
3. Select Phychem Technologies IPO.
4. Enter the required number of lots.
5. Enter your valid UPI ID.
6. Submit the IPO application.
7. Approve the UPI mandate received in your UPI application.
8. Confirm the mandate using your UPI PIN.
9. The application amount remains blocked in your bank account during the allotment process.
10. If shares are allotted, the applicable amount is debited; otherwise, the blocked amount is released according to the IPO process.