Good set of Q2 numbers from Sadhana Nitro chem. Top line, OPM and PAT increased YoY and QoQ respectively. Hoping for revenue from pAP and ODB2 to pick up significantly in the coming quarters.
Revenue From Operation: 42.01 cr vs 39.41 cr (QoQ) vs 36.53 cr (YoY)
Net Profit After Tax: 2.57 cr vs 0.06 cr (QoQ) vs -0.37 cr (YoY)
EPS: 0.10 vs 0.002 (QoQ) vs -0.01 (YoY)
(https://www.bseindia.com/xml-data/corpfiling/AttachLive/8f54fc19-684e-4958-8ee3-ea38c526817f.pdf)
Good to see, After June 2019, they released investor presentation now. This presentation covers everting about the company https://www.bseindia.com/xml-data/corpfiling/AttachLive/f3834cb9-88d0-4832-9bda-9a8ee90a0d2a.pdf
Anybody calculated increased capacity of ODB2 and PAP will result in how much revenue increase. I do find prices and how much they may be selling approx?
On the similar lines if some expert can suggest on how much revenue does the below mentioned capacities (with assumption of 100% utilization) translate to. That will be very useful data for the investors
PLI granted for PAP is 36000TPA, but current capacity is 3000TPA only. How does one visualise the 11x scale up…in terms of capex required, time frame and then revenue potential? Will appreciate guidance on this please.
How they’ll scale is a bigger question, and what if any other co. also comes out cracking this Nitrobenzene PAP process?
Sadhana Nitro is raising funds via rights issue. About 50 Crs. to acquire the land plot of 126 Acres. They will set up wind and solar power set up with future intent of creating green hydrogen in the said land plot.
Link - https://www.bseindia.com/xml-data/corpfiling/AttachLive/03266002-ed48-45eb-8a34-0159793bbaca.pdf
What does right issue being at Rs. 121 means while market price is running around Rs. 90?
Who will subscribe to this right issue? It is not mentioned in BSE filing. Does it mean promoter will subscribe? I can not figure out. Kindly help to build scenario.
Disclosure: Invested
Press Release in context of purpose for the Rights Issue. Providing more clarity.
https://www.bseindia.com/xml-data/corpfiling/AttachLive/a9bf065c-5d2d-43a1-bc75-448327a1fe75.pdf
A fund raise for the capacity expansion from 3k to 36k was an expected milestone…this professed backward integration appears more of a diversification. Can someone pl explain how this rights issue is complementing the long term objective of main line of biz. ( Disc - tracking qty)
Firstly the promoter have issued warrants for stock buy back program
Secondly the promoter is issuing right issue : The funds of the rights issue to be predominantly used for acquisition of a 126-acre land plot. This land will be strategically employed for the establishment of both a solar power facility and a wind energy
installation. These sustainable energy sources will be harnessed to generate electricity, which, in turn, will be utilized for the production of green hydrogen via water electrolysis.
Here is what’s on my mind :
The first step that the company took - is to expand from 3000 TPA to 6000 TPA which is not yet LIVE.
From the current Presentation which you can see here
The demand for local market is 6000 TPA - and the company is firstly trying to cater domestic needs.
Second
All the companies need to be follow ESG practices which is to have its own sustainable measure.
How does this help?
Already the company has worked hard on all chemical aspect to be sustainable and now its trying to be sustainable and reliable in a energy aspect.
How does this help going forward?
Factor of production : Land, Labor, Capital, Entrepreneurship
In China the cost of the labor has gone high that there is no way of coming down on the wage and its not economically feasible that’s where India has an advantage with respect to cost…
Same will happen to India going forward however if you could save cost in terms of energy, production etc that could balance out the odds and companies could earn profit by paying high wage to labor + free energy.
Now this is my thought and not a recommendation on anything…
My understanding … indian reqmt 60k, of which 15k is forthcoming
their capacity is 3k, at enhanced capacity of 36k (if they scale up) is designed as import substitution and hence the PLI…they will themselves consume some of their own capacity when the fwd integrate to Paracetamol prodn.
It seems like the promoters want to subscribe to the rights issue and increase their shareholding. Given that the CMP is lower than the rights price no one will subscribe and promoters will take the entire qty. We will come to know more about this when they file a Draft Letter of Offer for the rights issue with SEBI.
The second hint on the above rationale could be that the Board of Directors that approved the rights issue wouldn’t have passed the resolution unless they were confident that the rights issue would succeed.
What confuses me is that there are other ways to increase shareholding like Pref or warrants. Why didn’t the promoters opt for that unless there are some tax implication i am missing.
I guess they have done it at a price of 120+ just that the warrants conversion is not happening due to share price not catching up.
Promoters hold > 70% of the stake.
Sadhana was trading at 120-130 odd levels - guess 3-4 months back and they gave stock bonus pushing the price to 99, then the market corrected a bit thereby pushing it back to 70 odd levels.
The company has a total of 24.71 Crore shares outstanding.
Currently the Shares Float is : 5.7 Crore .
So there is very less shares to trade about 5.7 crore wherein 24.71 crore is company’s stock currently held by all its shareholders, and they include share blocks and restricted shares
Right issue may be just an indication to the investors maybe who wants to participate - I don’t know to be honest about all these things.
I just match the numbers to the implementation they do…
Has anyone noticed on chart selling pressure with volumes…although price stabilising in the range ~85-88. Good if someone can share chart view.
Hello @Prince_AI
Here is the full process of Continuous Batch processing for Para Amino Phenol
Starting Material Synthesis:
Nitrobenzene Production:
Reagents and Chemicals for Nitrobenzene Synthesis:
a. Nitric Acid
b. Sulfuric Acid
Reduction of Nitrobenzene to Aminophenol:
Intermediate Compounds:
Purification Agents:
By-products and Waste:
By-products and Waste Streams
Nitration of Nitrobenzene: Nitrobenzene is continuously fed into a reactor where it reacts with a nitrating mixture (nitric acid and sulfuric acid) to produce nitrophenol. The reactor conditions, such as temperature, pressure, and residence time, are controlled to achieve efficient nitration.
Separation and Isolation of Nitrophenol: After the nitration, the reaction mixture is passed through a separation system (such as distillation, extraction, or other separation techniques) to isolate nitrophenol from the reaction mixture. Continuous separation methods are employed to separate the desired product from unreacted starting materials and by-products.
Continuous Reduction of Nitrophenol to Aminophenol: The isolated nitrophenol is continuously fed into a reduction reactor along with the selected reducing agent in a continuous flow process. The reduction reactor is designed to facilitate the controlled conversion of nitrophenol to aminophenol using suitable reducing conditions.
Product Isolation and Purification: The resulting mixture containing aminophenol undergoes continuous separation and purification processes to isolate and purify para-aminophenol selectively. Various continuous purification methods, such as chromatography, crystallization, or filtration, may be employed to obtain the desired product in high purity.
And now coming for other players who are planning to enter, its not that easy as they would need regulatory approvals, site selection and construction Technology Selection and Installation, Process Development and optimization, Testing and Validation, Batch product sample to customer for approval, then improving quality, then making huge capex for intermediaries then formulations so on…
All in all - it will take 5-7 years at least… Vinati wanted to enter in here, they had all plans finally they left it and they went on focusing their own products…
Even if someone gets this done after say 4-5 years… Sadhana will be already in a formulation process of Paracetamol 
and they would already taken up most of the market share…
So always the first guy who get this done - will be way ahead then who is willing to join in a league and compete with them…
From the talks with Dhruv here : https://www.youtube.com/watch?v=5AHOn5Z1wA8
Credits to : Prince Accidental Investor, Dhruv Rawane, Mohit
@Prince_AI : I dont know if you are the same person hosted this call 
Water obtained from various reactions, including the reduction of nitro compounds to amino compounds like in the case of para-nitrophenol to para-aminophenol, can be a potential source of hydrogen.
The process of electrolysis can be used to split water into hydrogen and oxygen gases. This method involves passing an electric current through water, causing the water molecules to dissociate into hydrogen and oxygen gases:
The hydrogen gas produced from this process can potentially be collected and used as a source of fuel or in various industrial applications where hydrogen is needed.
However, it’s important to note that obtaining hydrogen through electrolysis of water requires energy input, and the process may not be as efficient or cost-effective as other methods for hydrogen production depending on the scale and available resources.
However one needs to be at caution that there is no much yield at current technology of Hydrogen and as we progress more into research of Hydrogen - we might come up with better ones that can leverage more power with less input cost
Thanks Nitin, really helpful. Yeah, I’m the same person who do these spaces session Glad people find some value
