Shanti Inorganics Ltd. IPO

Shanti Inorganics

• Shanti Inorganics is coming out with an initial public offering (IPO) of 56,91,200 shares in a price band of Rs 79 - 83 per equity share.
• The issue will open for subscription on August 31, 2026 and will close on September 2, 2026.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 10 and is priced 7.90 times of its face value on the lower side and 8.30 times on the higher side.
• Book running lead manager to the issue is Vivro Financial Services.
• Compliance officer for the issue is Maulik S Bhavsar.

Profile of the company

Shanti Inorganics is engaged in the business of manufacturing and supply of sulphur based inorganic chemicals. It holds one of the largest domestic production capacities for bisulphites with capacity of 18,800 MTPA. Its product portfolio consists of ammonium bisulphite solution, sodium bisulphite powder or solution, sodium meta bisulphite and sodium sulphite powder/anhydrous, which are primarily used as preservatives, reducing agents, oxygen scavengers and process intermediates across multiple industries such as food and beverages, chemicals, oil drilling, pharmaceuticals, ceramics, agrochemicals, water treatment, petrochemicals, cosmetics, paints, polymers, boilers and mining. In the inorganic chemical industry, products are categorized into multiple purity levels based on their applications, including, food grade and technical grade

Since its incorporation in the year 2010, the company has consistently expanded its production and operational capabilities. It commenced its business operations with production of sodium bisulphite in a powder form and thereafter started manufacturing of sodium bisulphite in a liquid form as well as started manufacturing of sodium metabisulphite, a higher-grade derivative of sodium bisulphite. In Fiscal 2016, it furthers expanded its product portfolio by commencing the manufacturing of ammonium bisulphite solutions. In Fiscal 2019, it transitioned from using sulphur burning furnaces to procuring liquefied sulphur dioxide (SO2) which improved production efficiency, reduced emissions and enhanced environmental compliance.

Proceed is being used for:

• Part-funding the capital expenditure towards setting up a new facility for manufacturing of sodium meta bisulphite, sodium bisulphite powder and ammonium bisulphite situated at Bavla, Ahmedabad, Gujarat
• General corporate purpose 

Industry overview

The chemical industry is one of the most pervasive sectors in manufacturing, owing to its critical role in enabling a wide array of end-use applications. The Indian chemicals industry is highly diversified, encompassing over 80,000 commercial products, including basic chemicals, petrochemicals, agrochemicals, paints, gases, personal care chemicals, and pharmaceuticals. It is a key enabler of India's industrial and agricultural development and acts as a fundamental building block for several downstream industries such as textiles, paper, packaging, paints and coatings, soaps and detergents, and healthcare. India's chemical industry has showcased robust growth over the years, evolving into a key pillar of the country’s manufacturing landscape. The industry stood at Rs 12 lakh crores in FY19 and expanded at a healthy CAGR of 14% to reach Rs 30 lakh crores by FY26.  

Within this broader ecosystem, the sulphur-based chemicals segment holds particular importance due to its wide industrial usage and essentiality in strategic sectors. Sulphur and its derivatives such as sulphuric acid, sulphur dioxide, and sulphur hexafluoride are critical inputs in fertilisers, dyes, detergents, pharmaceuticals, petroleum refining, water treatment, and metal processing. India is one of the leading consumers and producers of sulphur-based inorganic chemicals, driven primarily by its large agricultural base, expanding industrial activity, and growing demand from sectors such as fertilizers, water treatment, chemicals, pulp & paper, and textiles. The demand for sodium bisulphite in India has grown due to stricter industrial effluent treatment norms and expanding capacity in the paper, textile, and leather industries to reach Rs. 95 crores in FY26. The growth of urban water treatment infrastructure and industrial clusters has created steady domestic demand. Going forward, increasing investments in clean water and wastewater treatment under government initiatives like the Jal Jeevan Mission are expected to further support consumption with market growing at a CAGR of 8-9% to reach Rs. 121 crores by FY29.

India’s trade dynamics for inorganic chemicals continue to witness a structural shift towards export competitiveness. Between FY20 and FY24, imports remained significantly higher than exports, reflecting India’s dependence on overseas suppliers for key inorganic chemicals. However, the gap between imports and exports has narrowed considerably in FY25, supported by improving domestic production capabilities, rising capacity additions, and stronger demand for Indian inorganic chemicals in global markets.

Pros and strengths

Geographical diversification through exports to international market: The company exports various bisulphitessuch as ammonium bisulphite, sodium bisulphite solutions, sodium meta/ bisulphite, and sodium sulphite powder/anhydrous from India. For the two months period ended May 31, 2026, Fiscal 2026, Fiscal 2025 and Fiscal 2024, exports contributed 29.28%, 42.57%, 53.83% and 50.08%, respectively, of its revenue from operations. Some of the key geographies to which it exports its products include Eswatini, Malaysia, the United Arab Emirates, Qatar, Nigeria, Russia, Colombia, Turkey, Puerto Rico, Iraq, Vietnam, Azerbaijan, Egypt, Ghana and Philippines which also demonstrates strong geographical diversification. Its ability to serve diverse industries such as food and beverages, chemicals, oil drilling, pharmaceuticals, ceramics, agrochemicals, water treatment, petrochemicals, cosmetics, paints, polymers, boilers and mining, has contributed to its consistent revenue growth from exports.

Long standing relationships with diversified customers across multiple industries: The company has developed strong and long-term relationships with diverse customers that has helped it to expand its product offerings, processes and geographical reach. Its customers are engaged in multiple industries such as food and beverages, chemicals, oil drilling, pharmaceuticals, ceramics, agrochemicals, water treatment, petrochemicals, cosmetics, paints, polymers, boilers and mining, which helps it to mitigate risks resulting from customer, industry and geographic concentration. In the domestic market, it has sold its products to 29, 64, 48 and 46 customers for the two months period ended May 31, 2026, Fiscal 2026, Fiscal 2025 and Fiscal 2024. In the international market, it has sold its products to 8, 20, 21 and 21customers for the two months period ended May 31, 2026, Fiscal 2026, Fiscal 2025 and Fiscal 2024, respectively, spread across countries such as Eswatini, Malaysia, the United Arab Emirates, Qatar, Nigeria, Russia, Colombia, Turkey, Puerto Rico, Iraq, Vietnam, Azerbaijan, Egypt, Ghana and Philippines.

Certifications and compliance with quality and food safety standards: The company holds several quality certifications including ISO 9001:2015 that strengthen its position in the industry in which it operates. It is NSF certified for drinking water treatment chemicals which ensure its products meet safety and quality standards for use in potable water applications. Its ‘KOSHER’ certifications affirm that its products comply with Jewish dietary laws enable it to cater to the food and beverage industry. It also holds ‘HACCP’ certification which demonstrates its adherence to strict food safety standards and effective hazard control throughout the production process. Its ‘HALAL’ certification further confirms that its products meet the dietary requirements of Muslim consumers which expand its market reach across international markets.

Risks and concerns

Revenue is concentrated in food and beverages, oil drilling and chemical industries: The company derives a substantial portion of its revenue from the food and beverages, oil drilling and chemical industries. Revenue generated from sales to the food and beverages industry constituted 36.27%, 35.84%, 40.84%, and 37.75% of its total revenue from operations two months ended May 31, 2026 and Fiscal 2026, Fiscal 2025, and Fiscal 2024, respectively. Revenue from the oil drilling industry contributed 1.59%, 12.82%, 19.55%, and 14.41%, of its total revenue from operations in two months period ended May 31, 2026 and Fiscal 2026, Fiscal 2025, and Fiscal 2024, respectively, while revenue from the chemical industry contributed 37.69%, 22.38%, 15.76%, and 16.62% of its total revenue from operations in two months period ended May 31, 2026 and Fiscal 2026, Fiscal 2025 and Fiscal 2024, respectively. Consequently, any material decline in the performance of the food and beverages, oil drilling and chemical industries, or its failure to sustain, grow, or efficiently manage its sales within these industries may materially and adversely affect its business operations, financial condition and results of operations.

Reliance on top ten customers: The company’s maximum revenue derived from top ten customers. The company’s top ten customers accounted 71.03%, 63.35%, 68.15% and 67.41% of its Revenue in the two months period ended May 31, 2026, Fiscal 2026, Fiscal 2025 and Fiscal 2024, respectively. Its inability to acquire new customers or loss of all or a substantial portion of any of its major customers, for any reason and/or continued reduction of the business from them, could have a material adverse impact on its business, results of operations, cash flows and financial condition. Further, it does not maintain long-term contractual arrangements with the majority of its customers. As a result, the loss of one or more key customers, or any significant reduction in their demand for its products, could materially and adversely affect its business operations, financial condition, results of operations and cash flows.

A significant portion of revenue is derived from exports: A substantial portion of its revenue is derived from exports, exposing it to risks associated with international markets. Its revenue from sales outside India constituted 29.28%, 42.57%, 53.83%, and 50.08% of its total revenue from operations in the two months period ended May 31, 2026 and Fiscal 2026, Fiscal 2025, and Fiscal 2024, respectively. As a result, its business performance is significantly dependent on demand from international customers and global markets. Any adverse developments in these markets may materially and adversely affect its business operations, financial condition and results of operations.

Outlook

Shanti Inorganics is engaged in the business of manufacturing and trading of sulphur based inorganic chemicals. Its product portfolio consists of ammonium bisulphite solution, sodium bisulphite powder or solution, sodium meta bisulphite and sodium sulphite powder/anhydrous, which are primarily used as preservatives, reducing agents, oxygen scavengers and process intermediates across multiple industries such as food and beverages, chemicals, oil drilling, pharmaceuticals, ceramics, agrochemicals, water treatment, petrochemicals, cosmetics, paints, polymers, boilers and mining. On the concern side, a significant increase in the cost of raw materials, particularly if not matched by a corresponding increase in product pricing or revenue, could materially and adversely affect its profit margins and overall financial performance. For the two months period ended May 31, 2026, and Fiscal 2026, Fiscal 2025 and Fiscal 2024, the cost of materials consumed represented 58.43%, 38.79%, 40.76% and 45.29%, respectively of its total income. It procures its raw materials through purchase orders, which necessitates forecasting of supply and demand. Any failure to forecast such requirements may adversely affect its working capital, business operations and financial results.

The company is coming out with a maiden IPO of 56,91,200 equity shares of face value of Rs 10 each. The issue has been offered in a price band of Rs 79 - 83 per equity share. The aggregate size of the offer is around Rs 44.96 crore to Rs 47.24 crore based on lower and upper price band respectively. On performance front, its total income increased by 24.76% from Rs 5,845.98 lakh in financial year ended March 31, 2025, to Rs 7,293.39 lakh in financial year ended March 31, 2026. Profit after tax (PAT) increased from Rs 799.36 lakh in FY2025 to Rs 1,022.00 lakh in FY2026, representing an increase of 27.85%. 

Meanwhile, its business is conducted on a business-to-business basis and its focus is on maintaining contact with customers and ensuring timely delivery. Its sales and marketing activities for its products are carried out by its sales and marketing personnel, who are responsible for business development activities, acquisition of new clients and are instrumental in identifying and initiating dialogue to develop customer interest. Its sales and marketing team generates new business opportunities through various strategies, including cold calling, personal networking and building relationships within the industry in which it operates. Further, Avnish Patel, one of its Promoters, has been instrumental in the growth and development of the company by taking keen interest in customer development activities and interacting with key customers directly. The company services its domestic and export customers through its marketing and sales team in India.