August 20, 2025

Get ready, investors! Gem Aromatics is opening its IPO today, looking to rake in a whopping ₹451.3 crore. This fresh financial feast includes a new issue of about 53 lakh shares worth ₹175 crore and an offer for sale of roughly 85 lakh shares fetching ₹276.3 crore. With the face value at just Rs 2 per share and a lot size of 46 shares, retail investors need about ₹14,950 to jump on this bandwagon at the top price band. In terms of size, the company's market value after this issue could hit around ₹1,697.7 crore! The valuation stands at 31.8 times its FY25 earnings, with an EV/EBITDA ratio of 21.6 times. Grey market reports show a small 6% premium, hinting at flat or mild listing gains. What's the story behind Gem Aromatics? Founded over 20 years ago, they manufacture essential oils, aroma chemicals, and special derivatives. Their products serve exciting sectors like oral care, personal care, wellness, nutraceuticals, and pharmaceuticals. They supply 70 products across four categories — mint and its derivatives, clove and clove derivatives, phenol, plus synthetic and natural ingredients. Their three plants are located in Budaun, Silvassa, and Dahej. Gem Aromatics is a heavyweight player in India for clove oil, eugenol, and eucalyptus oil by volume, with a strong hold over mint-based ingredients. Nearly 51% of their FY25 revenue came from exports, with the USA as their largest overseas customer. Fresh money from the IPO will mainly help repay loans and support general corporate needs. Financially, the company has shown steady growth. Revenue jumped from ₹452.5 crore in FY24 to about ₹504 crore in FY25. EBITDA rose to ₹88.5 crore, and profit after tax hit ₹53.4 crore. Profit margins are looking healthy too, with EBITDA at 17.6% and PAT at 10.6% for FY25. So, should you hop on? Anand Rathi says “Subscribe – Long Term.” They see the IPO as fully priced but backed by Gem Aromatics’ strong position in essential oils, a wide product range, loyal big-name customers, and expanding capacity, all fueling future growth. However, watch out for risks like heavy reliance on top 10 customers who made up 56% of FY25 revenue (including a big deal with dōTERRA), concentration in mint derivatives, a land dispute at Budaun, and supplier dependence. Motilal Oswal Investment Advisors are handling the issue, and KFin Technologies is the registrar. So, will this IPO be your pot of gold in the essential oils world? Only time and markets will tell! But for now, it looks like a spicy mix of promise and caution for investors eyeing growth and stability.

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Tags: Gem aromatics, Ipo, Essential oils, Stock market, Anand rathi, Investment,