Prasol Chemicals IPO opens tomorrow at ₹643-676 price band, brokerages recommend subscribing for long-term

Prasol Chemicals Ltd is set to launch its ₹500-crore initial public offering (IPO) on September 8, 2026, with the share price band fixed between ₹643 and ₹676 per equity share. The IPO will close on September 10, and anchor investor bidding will occur on September 7. The company's fresh issue of equity shares is valued at up to ₹80 crore, while an offer for sale of shares by existing shareholders is up to ₹420 crore.

The proceeds from the fresh issue will be utilized for debt repayment, working capital needs, and general corporate purposes. At the upper range of the price band, Prasol Chemicals is valued at approximately ₹6,001 crore. The company, formerly known as Prachi Poly Products Private Ltd, changed its name to Prasol Chemicals in 2007 before becoming a public company again in 2022.

Specializing in acetone and phosphorus-based specialty chemicals, Prasol Chemicals also produces various derivatives used in pharmaceuticals, agrochemical active ingredients, and formulations. These chemicals are critical raw materials for products like sunscreens, shampoos, flavours, fragrances, and disinfectants.

JM Financial and DAM Capital Advisors are the book-running lead managers for the issue. SBI Securities recommends investors subscribe to the IPO for the long term, citing the company's diversified specialty chemicals portfolio and its position as the sole manufacturer of isophorone in India. The brokerage highlights impressive revenue growth (18.6% CAGR) and profitability (EBITDA and adjusted PAT) over the past three fiscal years (FY24-FY26).

They expect the company to use ₹60 crore from the fresh issue to repay debt, reducing leverage to a more favorable 0.1x debt-to-equity ratio compared to 0.2x in FY26.

At ₹676 per share, the issue is valued at 48.1x FY26 P/E, which the brokerage deems reasonably priced compared to peers, with attractive return ratios. Anand Rathi, another brokerage firm, emphasizes Prasol Chemicals' diversified product portfolio, long-standing customer relationships, and expanding global presence. These factors contribute to revenue visibility and reduced dependence on a single end-market, further strengthening the company's long-term revenue prospects and competitive position.

The specialty chemicals business is characterized by high entry barriers due to lengthy customer approval cycles, complex chemistry, high product-development costs, and stringent regulatory requirements, which foster customer loyalty and make displacement challenging.