Indian Phosphate's Revenue From HUL To Double With Expanded Offerings, Says CEO Parmar

Indian Phosphate Ltd. plans to expand its product range and geographic presence will likely double the company's revenue from Hindustan Unilever Ltd., according to Rohit Paragbhai Parmar, the company's chief executive officer.

"Yes, our exposure to HUL could increase from Rs 500 crore to close to Rs 1,000 crore with the new capacity coming into play," Parmar told NDTV Profit in a televised interaction.

According to its draft IPO prospectus, Indian Phosphate’s growth trajectory and significant revenue come from Hindustan Unilever Ltd. The company generates approximately 74-75% of its revenue from HUL, making it a critical part of the company's revenue stream.

"We’re establishing a dedicated facility in Tamil Nadu for sulphuric acid and Labsa 90 (Linear Alkyl Benzene Sulfonic Acid). Once fully operational, this new setup is expected to add over Rs 250 crore to our top line annually," Parmar said.

The plant will be commissioned by December 2024. After becoming functional in January 2025, the sulphuric acid plant will have an installed daily capacity of 200 metric tonne, which amounts to around 60,000 metric tons per year, the CEO said.

"In the last three years, about 85% of our total revenue has come from the chemical business," Parmar said. "We have grown at around 34% CAGR, with our top line increasing from Rs 414 crore in 2021-22 to Rs 704 crore last year," he said.

The initial public offering of Indian Phosphate, which opened on Monday and closes on Thursday, has already been fully subscribed.

The SME IPO, priced between Rs 94 and Rs 99 per share, involved a fresh issue of Rs 67.36 crore aimed at supporting the company's capital expenditure plans.

Additionally, the company is also setting up a new plant in Maharashtra for single super phosphate and diversifying into nine other products. "We are setting up a new SSP plant in Maharashtra to cater to local demand and support the government's Make in India initiative," Parmar said. 

The company also has two facilities in Udaipur with a combined capacity of 1.05 lakh metric tons, which will be mostly utilised within a year or two. "The Udaipur facility will continue to cater to the northern region requirements of HUL, while the new plant coming up will address the southern region requirements," Parmar said.  

The company plans to use proceeds from its IPO to retire its working capital requirements and go completely debt free and fund its Tamil Nadu expansion, he said.

Government subsidy on fertiliser and rail freight has been expanding our geographic reach. "For example, if I’m transporting from a railhead in Udaipur to a railhead in West Bengal, I receive the entire rail freight as a subsidy from the government. So, I have two subsidies—one for the product and another for freight, which makes me competitive even in distant states," he said.