Chemkart India

• Chemkart India is coming out with an initial public offering (IPO) of 32,29,200 equity shares in a price band Rs 236-248 per equity share.
• The issue will open on July 7, 2025 and will close on July 9, 2025.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 23.60 times of its face value on the lower side and 24.80 times on the higher side.
• Book running lead manager to the issue is Smart Horizon Capital Advisors.
• Compliance Officer for the issue is Ramdulari Saini.

Profile of the company

Chemkart India is a one stop destination for various nutritional, Health and sports supplement products, which are largely biased towards the food products providing health benefits in addition to their nutritional values, reflecting its ability in catering to nutritional as well as health needs of the end customers. The company is based in Mumbai, offering diverse range of captivated nutritional supplements and components. It offers products across mainly seven product categories, i.e. Amino Acids, Health Supplement, Herbal Extract, Nucleotide, Protein, Sports Nutrition, and Vitamin. Thus, positioning it favorably to adapt to the growing awareness with respect to the needs of nutrition in the food products.

It targets the Business to Business (B-to-B) platform which uses its products into manufacturing of finished supplements which includes sports supplements, health supplements, vitamins, protein products etc. Its product assortment and customer-centric approach aims to fulfil the daily and aspirational requirements of the end customers with a focus on variety, affordability, quality and convenience. Since the commencement of its operations, it has developed good standing relationships with its customers. It also engages actively with its suppliers to improve its supply chain processes.

Proceed is being used for:

• Financing the capital expenditure towards setting up of the Manufacturing Facility through investment in its Wholly Owned Subsidiary (WOS) Company, Easy Raw Materials Private Limited
• Repayment/prepayment of all or certain of its borrowings availed of by the company
• General corporate purposes 

Industry Overview

The global nutraceutical market is currently estimated at around $400 billion, blending the fields of food, pharmaceuticals, and biotechnology. India stands out as a key player, supported by its rich heritage of traditional knowledge, especially in Ayurveda, and a unique ecosystem that fosters growth in this sector. However, India's share remains under 2% globally, primarily due to a lack of defined industry classification within Indian ministries, limiting targeted sector support.

Recognizing the sector’s immense potential, the Council of Scientific and Industrial Research (CSIR) constituted a Nutraceutical Sector Task Force (TF) in November 2021 under the chairmanship of the Principal Scientific Adviser to the Government of India. This Task Force includes representatives from various ministries, including the Department of Commerce, the Department of Pharmaceuticals, the Food Safety and Standards Authority of India (FSSAI), the Ministry of AYUSH, and the Ministry of Food Processing. The TF also includes significant industry representation, ensuring that industry concerns and challenges are directly addressed. The Task Force’s mandate includes proposing policy measures to address challenges and drive initiatives toward the “Harmonized System of Nomenclature” and other international standards.

India has also prioritized infrastructure support, with nutraceutical incubation hubs and centers of excellence. NIFTEM-Kundli, Centurion University, and AIC-CSIR-CCMB have developed hubs fostering innovation, while the Kerala government inaugurated the first government-backed Nutraceutical Centre of Excellence in 2024. Through the Department of Commerce, India has showcased its nutraceutical strengths at global trade fairs, enhancing visibility and forging connections with international stakeholders. The collaboration between the Task Force and the Central Board of Indirect Taxes and Customs (CBIC) is working toward a unique HSN code to streamline exports and simplify customs procedures. With these strategic initiatives, India’s nutraceutical sector is set for unprecedented growth. India aims to position itself as a global leader in nutraceuticals, combining traditional knowledge with modern science to attract global partnerships and investments.  

Pros and strengths

Diversified product portfolio: The company’s understanding of the customer’s requirements, its product understanding capabilities, has allowed it to develop a comprehensive portfolio of a variety of nutraceutical products. It offers products mainly across seven product categories, i.e. Amino Acids, Health Supplement, Herbal Extract, Nucleotide, Protein, Sports Nutrition, Vitamin and many more under other health products category in different packaging sizes. Its diversified product portfolio enables it to cater to a wide range of customer preferences.

In house processing and warehousing capabilities: It also provides grinding and blending facility for few of the nutraceutical products at its processing unit. Blended ingredients are the mixture of various ingredients that is required to make a final product in its most authentic form. It is equipped with warehouse which enables blending, grinding and packaging of ingredients all in a hygienic way. The company has trained and experienced staff in terms of blending grinding and hygienic storages/ warehousing facilities. It also uses contract labourers for grinding and packaging in large bulk quantities who are specialised in this field.

Value proposition for customers: The company is catering to B2B segment which give it the advantage of wide spread customer network. It seeks to build on existing relationships and also focuses on bringing into its portfolio more customers. A long-term customer relationship with large customers reaps fruitful returns. Long-term relations are built on trust and continuous meeting with the requirements of the customers which creates value proposition for its existing as well as future customers and top end advantage is received in nutraceutical sector.

Risks and concerns

Significant revenue comes from limited customers: The company is dependent on certain customers for a significant portion of its revenues. The company has garnered 45.91%, 40.64% and 54.61% of its total revenue from top 10 customers in FY25, FY24 and FY23 respectively. Since the company’s revenues depend on a select number of customers, any adverse developments in its relationships with them or any disputes with them may adversely affect its business and revenues. The loss of one or more of its significant customers or a reduction in the amount of business it obtains from them could have an adverse effect on its business and results of operations.

Limited operational history in trading nutraceutical products and health supplements: As the company was incorporated in the year 2020, it may not have established a consistent performance history, making it difficult to predict future success. The nutraceutical sector is heavily regulated and have limited operating history which may mean that the company has less experience in navigating complex regulatory environments, potentially leading to compliance issues. With limited experience, the company may encounter challenges in the research, development and processing of effective nutraceutical products, which could impact their viability in the market. Further, the company may have less established relationships with suppliers, leading to potential disruptions, higher costs, or variability in product quality.

Geographical constrain: Currently majority of the company’s sales is derived from the state of Maharashtra, Gujarat and New Delhi. For the financial years ended March 31, 2025, 2024 and 2023 on the basis of Audited Standalone Financial Statements, its sales were Rs 11,579.56 lakh, Rs 8,786.82 lakh and Rs 10,209.32 lakh which constitutes 56.97%, 66.55% and 77.71% respectively of the Revenue from operations from Maharashtra, Gujarat and New Delhi. Any adverse developments affecting its operations in these regions could have an adverse impact on its revenue and results of operation.

Outlook

Chemkart India is a distributor specializing in high-quality food and health ingredients. The company bridges the gap between global ingredient manufacturers and businesses across various sectors. The company has diversified product portfolio. It also has in house processing and warehousing capabilities. On the concern side, the company’s business operations rely significantly on the continuous and timely supply of products from top 5 and top 10 suppliers. Also, it does not have continuing and exclusive supply agreement with them. Any interruptions or discontinuation of same will adversely impact its overall performance and profitability. Moreover, it sources its majority of the products from international market i.e. China. Any adverse developments affecting its procurement in this region could have an adverse impact on its revenue and results of operations.

The company is coming out with a maiden IPO of 32,29,200 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 236-248 per equity share. The aggregate size of the offer is around Rs 76.21 crore to Rs 80.08 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations increased by 53.97%, from Rs 13,202.69 lakh in fiscal year 2024 to Rs 20,327.85 lakh in fiscal year 2025. Moreover, for Fiscal 2025, the company reported a net profit of Rs 2,427.10 lakh, a significant increase compared to Rs 1,451.82 lakh in Fiscal 2024.

The company’s product management and supply chain team can identify global trends early and bring novel products to the Indian market faster than competition. This gives a first-mover advantage to the company. The company has a large opportunity in health and nutraceutical ingredients for the export market. With an increasing focus on wellness, customers are more inclined towards preventive healthcare rather than treatment of illnesses. This has led to a rise in the demand for dietary supplements, functional foods and beverages that promote overall health. With a rise of fitness culture, there is an increasing demand for sports nutrition products, such as protein powders, amino acids and energy supplements.