IGI Logo

Renol Polychem

* Renol Polychem is coming out with an initial public offering (IPO) of 24,54,000 equity shares in a price band Rs 100-105 per equity share.

* The issue will open on July 31, 2025 and will close on August 4, 2025.

* The shares will be listed on SME Platform of NSE.

* The face value of the share is Rs 10 and is priced 10.00 times of its face value on the lower side and 10.50 times on the higher side.

* Book running lead manager to the issue is Corporate Makers Capital.

* Compliance Officer for the issue is Ankur Rastogi.

Profile of the company

Renol Polychem is engaged in the manufacturing of colour masterbatches, colour pigment, filler granule, anti-moisture powder, carbon noodles, superpack & onepack, impact modifier, processing AID and tinanium dioxide. It started its operations/ business at Rajkot in 2008 and commenced its manufacturing operations in 2020. The company also specializes in manufacturing of customized masterbatch and pigments to suit the specific requirements of its customers/ manufacturers.

The company is also providing solutions such as all-in-one additive containing stabilisers, impact modifier, color pigments etc. to help the manufactures/ producers of UPVC, & CPVC pipes, Pipe fittings and manufacturing of other plastic products. The company specializes in manufacturing of customized masterbatch and pigments to suit the specific requirements of its customers/ manufacturers. The company is also providing solutions such as all-in-one additive containing stabilisers, impact modifier, color pigments etc. to help the manufactures/ producers of UPVC, & CPVC pipes, Pipe fittings and manufacturing of other plastic products.

The company is running its business on B2B basis and selling or distributing its products directly to business or manufacturing or commercial organizations manufacturing the end products using its products as raw materials. The company has started manufacturing in 2020 by purchasing machinery in July, 2020. After the purchase of machinery, it began the manufacturing of Super Pack & One Pack, Anti-Moisture Powder and Colour Pigment in August 2020. After some time, it began manufacturing of Impact Modifier, Processing Aid, and Titanium Dioxide in September 2020. Further, achievement of manufacturing of said products, the company commenced manufacturing of Filler Granules, Carbon Noodles and Colour Masterbatches in October 2020.

Proceed is being used for:

* Meeting out the capital expenditure in requirements for the purchase of machinery

* Repayment of certain borrowings

* Meeting out the working capital requirements

* Meeting out the general corporate purposes 

Industry Overview

India Masterbatch Market size was valued at $12.4 billion in 2023 and the total India Master Batch Market revenue is expected to grow at a CAGR of 4.8 % from 2024 to 2030, reaching nearly $17.22 billion. India's Master Batch to a concentrated mixture of pigments, additives, or modifiers that are used in plastic processing to impart color, enhance properties, or improve processing characteristics. It is extensively used across various industries like packaging, automotive, construction, and more to improve the performance and aesthetics of plastic products. The Master Batch Market in India has experienced substantial growth owing to the rising demand for plastic products in different sectors. It includes the production, distribution, consumption, and trade of these masterbatch products, considering factors such as demand, supply chain dynamics, and technological advancements.

Western India leads the Master Batch Market in India. The region encompasses key industrial zones and harbors major manufacturing hubs. Gujarat, a significant state within Western India, hosts multiple industries, including plastics, packaging, automotive, and textiles, contributing substantially to the masterbatch India Master Batch Market. The vibrant chemical and polymer industries in Gujarat, supported by the presence of industrial clusters like Ankleshwar and Vapi, drive the demand for masterbatch products. Maharashtra, another prominent state in this region, hosts a multitude of manufacturing units, further augmenting the market. The concentration of plastic, packaging, and automobile industries in Maharashtra, particularly in cities like Mumbai and Pune, fuels the demand for masterbatches. Southern India exhibits promising potential for future growth in the India Master Batch Market.

Biodegradable and sustainable masterbatch are designed to degrade naturally over time, reducing their environmental impact. These formulations contain environmentally friendly additives or polymers. Biodegradables and sustainable master batches includes bio-based, compostable and oxo-degradable masterbatches. Companies are focusing on ecofriendly alternatives to address the environmental concerns related to plastic pollution and resources depletion. Such development along with growing environment awareness, stringent government regulations and compliances for single use plastics and increasing consumer preference for eco-friendly products, are expected to generate growth opportunities for the stakeholders in the coming years.

Pros and strengths

Diversified product range appealing to a wide range of customers: The company has diverse product portfolio across various categories. It deals in a wide range of products, which enables it to cater widespread customer base across India and also expand its reach in international locations. Over the period, it has expanded its focus from trading of products to manufacturing of products. The company has necessary resources, experience and network to launch additional products in future and to cater to wider range of products related to its industry as per requirements of the customers.

Cordial relationship with the customers/ vendors: Offering quality products at attractive prices is a key aspect of maintaining and expanding its relationships with its customers. The company has adopted several initiatives designed to improve its cost efficiency such as strategic vendor relationship for the procurement of raw materials, local sourcing to mitigate transportation costs, focus on engineering, reduce customer response time, an emphasis on increasing customer support through after-sales services etc. These endeavors, including the optimization of in-house processes, are fundamental to its commitment to delivering projects while upholding cost-effectiveness. It continues to invest in operational excellence throughout the organization without any compromise on the quality.

Rich management experience: The company’s Promoter Bhaveshbhai Mansukhbhai Harsoda hold substantial experience in manufacturing and supply of color masterbatches and impact modifiers of more than 15 years. The company is managed by a team of experienced and professional personnel, exclusively focused on different aspects of the industry. The team comprises of personnel having operational experience and they are capable of creating and facing the challenges of growth within the company. The company’s management team’s experience and their understanding of its industry will enable it to continue to take advantage of both current and future market opportunities.

Risks and concerns

Substantial portion of its revenues has been dependent upon few clients: For the period ended May 31, 2025, the company’s top ten Customers accounted for around 34.36%, of its revenue from operations. Its business from customers is dependent on its continuing relationship with such customers, the quality of its products and its ability to deliver their orders on time, there can be no assurances that such customers will continue to do business with it in the future on commercially acceptable terms or at all. However, in case of any change in the buying pattern of its end users or disassociation of major customers can adversely affect its business or if its customers do not continue to purchase products from it, or reduce the volume of products purchased from it, the company’s business prospects, results of operations and financial condition may be adversely affected.

Geographical constrain: The company’s business operated in one area i.e. State of Gujarat. As a result, any localized social unrest, natural calamities, distress or breakdown of services and utilities in and around this region, could have material adverse effect on its business, financial position and results of operations. Further, any continuous addition of similar industries/competitors in and around these areas, without commensurate growth of its infrastructural facilities may put pressure on the existing infrastructure and also increase competition in the area, which may affect its business and results of operation.

No long term agreements with suppliers for supply of raw material: The company depends on a number of suppliers within India for procurement of raw materials required for manufacturing its products. For the period ended May 31, 2025 and Fiscal Year ended 2025, 2024 and 2023, its Cost of Goods Sold amounted to 82.13%, 84.31%, 82.80% and 92.01% of its total revenue respectively. For the financial year ended March 31, 2025, 2024 and 2023 purchases from its top ten suppliers amounted to Rs 3,389.55 lakh, Rs 3,543.78 lakh and Rs 3,428.32 lakh respectively which represented 61.53%, 74.88% and 84.83% of its total raw material purchases. The company has not entered into long term contracts with its suppliers and prices for raw materials are normally based on the quotes it receives from various suppliers. Any discontinuation of production by these suppliers or a failure of these suppliers to adhere to the delivery schedule or the required quality and quantity could hamper its manufacturing schedule.

Outlook

Renol Polychem is a manufacturer and supplier specializing in colour masterbatches, plastic masterbatches, industrial chemicals, impact modifiers, plastic pigments, and more. Its product range includes various color masterbatches such as green, red, yellow, orange, pink, blue, brown, violet, ivory, white, maroon, silver, multicolor, and black, as well as transparent plastic filler masterbatches. The company has diversified product range appealing to a wide range of customers. On the concern side, substantial portion of the company’s revenues has been dependent upon few clients. The loss of any one or more of its major clients would have a material effect on its business operations and profitability. It derives significant portion of revenue from sale of limited variety of its products. An inability to adapt to evolving consumer preferences and demand for particular products, or ensure product quality may adversely impact demand for its products and consequently its business, results of operations, financial condition and cash flows.

The company is coming out with a maiden IPO of 24,54,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 100-105 per equity share. The aggregate size of the offer is around Rs 24.54 crore to Rs 25.77 crore based on lower and upper price band respectively. On performance front, revenue from operations has increased from Rs 5,226.23 lakh in year ended March 31, 2024 to Rs 6,229.90 lakh in year ended March 31, 2025 with a resultant increase of 19.20% in year ended March 31, 2025. Moreover, Net profit after tax increased from Rs 394.45 lakh in year ended March 31, 2024 to Rs 499.68 lakh in year ended March 31, 2025 with a resultant increase of 26.67%.

The company’s growth in other states in the country can fetch it new business expansion and opportunities. It is currently located at Gujarat. Going forward, the company intends to establish its customer base in other locations of the country. Its emphasis is on scaling of its operations in other markets shall provide it with attractive opportunities to grow its client base and revenues. Apart from expanding business and revenues it has to look for areas to reduce costs and achieve efficiencies in order to remain a cost competitive company. It tries to reduce the wastages and control the production on the production floor through effective supervision. Its focus has been to reduce the operational costs to gain competitive edge.