🧠 Food for thought

Implications, context, and why it matters.

Specialty chemicals companies often experience volatile cycles that can create IPO timing opportunities

• Supreet Chemicals demonstrates the cyclical nature of specialty chemical businesses, experiencing a 23% revenue decline in fiscal 2024 before achieving recovery with 103% profit growth to ₹51.9 crore and a 51% revenue increase to ₹362.5 crore in FY202512.
• The company’s capacity utilization improved significantly from approximately 60% two years earlier to nearly 75% in FY2025, suggesting both market recovery and operational efficiency gains3.
• This turnaround likely created an opportune window for the IPO filing, as companies typically seek public markets when showing strong growth momentum rather than during downturns.
• The timing aligns with a broader pattern where specialty chemical companies leverage periods of financial recovery to access capital markets for expansion, as evidenced by the company’s plan to allocate ₹310 crore of IPO proceeds toward a new Vapi manufacturing facility3.

High working capital requirements remain a persistent challenge for specialty chemical manufacturers

• Supreet Chemicals faces substantial working capital pressures, with gross current assets estimated at 311 days as of March 2024, indicating nearly 10 months of sales tied up in inventory and receivables2.
• The company carries ₹203.5 crore in outstanding borrowings as of July 2025, with ₹65 crore of IPO proceeds specifically earmarked for debt repayment34.
• This working capital intensity is characteristic of specialty chemical businesses due to complex manufacturing processes. Supreet’s SAMBA molecule production involves a 15-step process and the need to maintain diverse inventory for multiple end markets including textiles, pharmaceuticals, and personal care1.
• The company’s export sales accounting for about 25% of total revenue adds another layer of working capital complexity through longer collection cycles and currency exposure3.