1. At a Glance
Renol Polychem is launching a ₹25.77 Cr SME IPO (fully fresh issue of 24.54 lakh shares at ₹100–₹105). Retail investors need to invest ₹2.40 lakh (2 lots) to enter. Opens July 31, closes August 4, and lists on NSE SME by August 7, 2025. Financials show jaw-dropping growth—question is, can it last?
2. Introduction
From colour masterbatches to impact modifiers, this Rajkot-based company has turned its pigments into profits. FY25 revenue shot up 859% and PAT soared 226%. Either they found a goldmine in plastics or FY24 was an accidental snooze. Priced attractively, but will the shine fade?
3. Business Model – WTF Do They Even Do?
Renol Polychem makes:
- Colour masterbatches (green, red, blue, multicolour, etc.)
- Filler masterbatches (talc, calcium carbonate blends)
- Additive masterbatches (UV stabilisers, flame retardants)
- Polymer compounds & pigments
Clients span packaging, automotive, agriculture, electronics and more. Basically, they sell the colour and strength behind your plastic goods.
4. Financials Overview
FY25 numbers are fireworks:
- Revenue: ₹62.6 Cr (+859%)
- PAT: ₹5.0 Cr (+226%)
- EBITDA: ₹7.1 Cr
- Net Worth: ₹13.3 Cr
Explosive growth, but a low base effect is obvious.
5. What’s This Stock Worth?
- Pre-IPO P/E: 11.5x (EPS ₹9.10)
- Post-IPO P/E: 12.2x (EPS ₹8.62)
- Fair Value Range: ₹95–₹115
Edu Punchline: Valuation fair, but sustainability of margins is the real test.
6. What-If Scenarios
| Scenario | Outcome |
|---|---|
| Growth continues | Stock rerates quickly |
| Margins slip | Stock corrects to issue price |
| New plant + capex delivers | Long-term winner |
7. What’s Cooking (SWOT)
Strengths – Explosive growth, high ROE, diversified masterbatch range.
Weaknesses – Growth volatility, small workforce (15 employees).
Opportunities – Expanding capacity with IPO funds, rising demand in plastics.
Threats – Raw material price swings, environmental regulations.
8. Balance Sheet 💰
| (₹ Cr) | FY25 |
|---|---|
| Assets | 23.4 |
| Liabilities | 10.1 |
| Net Worth | 13.3 |
| Borrowings | 6.9 |
Debt/Equity at 0.52—moderate leverage.
9. Cash Flow (FY23–FY25)
| FY | Ops | Investing | Financing |
|---|---|---|---|
| 23 | Weak | Low | Debt heavy |
| 24 | Stable | Low capex | Controlled |
| 25 | Strong | Capex rising | IPO to fuel |
Cash flow strengthened with scale-up.
10. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROE | 45.4% |
| ROCE | 64.2% |
| PAT Margin | 8.0% |
| EBITDA Margin | 11.4% |
| D/E | 0.52 |
ROE sizzling, but depends on sustained earnings.
11. P&L Breakdown – Show Me the Money
| FY | Revenue | EBITDA | PAT |
|---|---|---|---|
| 23 | 41.9 | 1.1 | 0.7 |
| 24 | 6.5 | 2.2 | 1.5 |
| 25 | 62.6 | 7.1 | 5.0 |
Wild revenue swings—FY24 was the odd year.
12. Peer Comparison
| Company | P/E | ROE | Margin |
|---|---|---|---|
| Renol (Post) | 12x | 45% | 8% |
| SME Chemicals Avg | 14–16x | 20% | 6–8% |
Renol trades cheaper with stellar returns—if growth holds.
13. EduInvesting Verdict™
Renol Polychem IPO offers a rare SME mix of high ROE, strong margins, and fair pricing. The FY25 growth looks phenomenal, but one-off jumps are risky.
Final Take: Interesting SME bet with high upside—provided you believe the colour won’t fade.
Written by EduInvesting Team | July 27, 2025
Tags: Renol Polychem IPO, SME IPO, ₹25.77 Cr, Colour Masterbatch Manufacturing, EduInvesting Premium
