Neochem Bio Solutions Limited is a specialty performance chemicals manufacturer offering 350+ customized formulations across polymers, surfactants, silicones, esters and bio-based sustainable solutions. The company earns revenue by supplying customized chemicals to textile, home & personal care, industrial cleaning, paper, paints, water treatment and construction industries. Its products serve as critical functional additives improving strength, finishing, processing efficiency and lifecycle performance of end-use products.

Key Clients & Manufacturing Facilities
The company serves diversified domestic and international clients across India, Bangladesh, Vietnam, Australia, Egypt, Turkey, Uzbekistan, South Korea and Canada. Repeat customers contributed 90.88% in FY25 and 99.05% in H1 FY26, indicating strong client stickiness. The company operates a single manufacturing facility at Moraiya, Ahmedabad with in-house R&D, product application lab, ZLD (Zero Liquid Discharge) infrastructure and ISO 9001/14001/45001 certifications, enabling sustainable and compliant production.

Product Portfolio & Order Book Position
Neochem’s portfolio spans performance polymers, surfactants, silicones, esters and bio-based alternatives. These products lie at the “process-critical chemical input” stage for customers, meaning they directly influence product quality, durability and processing lifecycle. The company caters to demand through short-cycle purchase orders rather than long-term contracts, with no firm order book due to industry structure. However, repeat business above 90% provides stable execution visibility.

Mergers, Capex & Future Expansion Plans
The company plans capacity expansion and process modernization, supported by strong cash flows and improved profitability (ROE 48.8% in FY25). Future plans include scaling sustainable chemistries, enhancing exports, expanding R&D capabilities, and optimizing manufacturing via energy-efficient and low-emission processes. The company will fund these plans through internal accruals, debt and IPO proceeds.

Employees & Bankers
As on September 30, 2025, our Company had 64 employees, The Banker to the Company is Axis Bank Limited.

MANAGEMENT & VISION

Neochem is led by Managing Director Swapnil R. Makati and Whole-time Director Hemangini S. Dathia, supported by a professional senior management team. The leadership aims to build India’s leading specialty performance chemical company with focus on green, bio-based and customized formulations. Their near-term vision includes strengthening export markets, expanding manufacturing capacity, accelerating automation and enhancing R&D.

Long-term targets include doubling product portfolio depth, achieving higher global certifications and becoming a preferred supplier for technical textiles, home & personal care and industrial solutions. Funding for capex will be arranged through IPO proceeds, internal accruals, and prudent long-term borrowing, supported by strong cash generation and improving ROCE (41.7% in FY25).

INDUSTRY OVERVIEW

The Indian specialty chemicals industry is growing at ~10–12% CAGR, driven by rising domestic demand, China-plus-one sourcing and expanding applications across textiles, home care, coatings, construction, and water treatment. The global specialty chemical industry is significantly larger, with growth expectations of 5–6% CAGR led by sustainability transitions and bio-based chemistries.

Within India, the performance chemicals segment is among the fastest-growing verticals, supported by strong export potential. Market leaders include Rossari Biotech, Aarti Industries, Atul, and Indian Emulsifiers. Neochem’s revenue grew at 32% CAGR over FY23–FY25, outperforming industry peers, indicating strong positioning in the sector.

RISK FACTORS

1. High Dependence on Repeat Customers
   Repeat customers contribute 90–99% of total revenue. Any decline in orders, change in procurement strategy, or financial stress of major clients can significantly affect revenue visibility and capacity utilization.
2. Geographical Concentration of Raw Material Procurement
   Over 71% of raw materials are sourced from Gujarat (FY25). Any supply disruptions, regulatory actions, cost inflation or logistical issues in this region can directly affect production schedules and margins.
3. Absence of Long-term Customer Contracts
   Sales are based on short-term purchase orders without volume commitments. This creates uncertainty in production planning, inventory management and pricing stability, impacting margins and operational efficiency.
4. Intense Competition
   The specialty chemical industry is competitive with domestic and global manufacturers offering cost-effective products. Competitors with stronger technology, capacity, or pricing power can pressure margins and market share.
5. Contract Labour Dependency
   With 72 contract labourers as of H1 FY26, any default by contractors in wage payments can expose the company to legal liabilities, financial penalties, and workforce disruption.
6. Delayed Statutory Compliances
   The company has had delays in GST, PF, ESIC, and TDS filings in past years. Recurring delays may attract penalties and reflect gaps in internal compliance systems.
7. Working Capital Risks
   Any delay in customer payments increases working capital requirements and can strain liquidity. Despite no major defaults, delays can reduce cash flows and impact profitability.

KEY STRENGTHS & OPPORTUNITIES

1. Diversified Product Portfolio
   With 350+ customized formulations across polymers, surfactants, silicones and esters, the company caters to multiple industries, reducing concentration risk and enabling cross-segment demand opportunities.
2. Strong R&D and Sustainable Chemistry Focus
   The in-house lab develops high-performance, bio-based and eco-compliant chemicals, including plant-derived softeners and phosphate-free agents. Certifications like ZDHC Level 3 and GOTS 7.0 enhance credibility.
3. Robust Distribution Network
   A network of 50+ domestic distributors and direct exports to over 12 countries helps the company scale volumes efficiently while increasing brand visibility in global markets.
4. High Growth & Improving Financial Metrics
   Revenue CAGR of 32%, operating margin expansion from 8.8% to 15.6%, and ROE improvement to 48.8% demonstrate strong operational efficiency, cost control and profitability momentum.
5. Zero Liquid Discharge (ZLD) Facility
   ZLD capability enhances sustainability, reduces environmental risk, and differentiates the company from peers, supporting regulatory compliance and customer acceptance in international markets.
6. Strong Customer Stickiness
   With over 90% repeat business, the company has deep relationships and high product dependency within client operations, ensuring long-term order continuity and stable revenue streams.