1 HEM SECURITIES LTD. AWARD WINNING MERCHANT BANKER

INVESTOR PRESENTATION HINDCON CHEMICALS LIMITED

COMPANY OVERVIEW 2

Company Name Hindcon Chemicals Limited

Registered Office Kolkata, West Bengal

Factory Howrah, West Bengal

Date of Incorporation August, 25 1998

Exchange NSE – EMERGE

Industry Chemicals

• Incorporated on August 25, 1998 and since then company is engaged in manufacturing of chemicals particularly for construction industry. They offer a wide range of chemical products which finds variety of applications in the construction sector.

• In F.Y. 2016-17, their net revenue of operations comprised of Rs. 33.94 Crore of which 32.14% comprises of

export sales to Nepal, Bhutan and Bangladesh.

• Company have developed a wide portfolio over 100 products which has made them one stop shop provider of construction chemicals. Product portfolio includes Protective waterproofing coatings, Sodium Silicates, Concrete & mortar admixtures, Epoxy grouts & mortars, Waterproofing compounds, Shot crete aids, Remover cleaning compounds, Sealants, Tile adhesives etc.

• Company is also involved in a continuous process of modifying their products to eliminate any harmful ingredient so as to serve the society with echo-friendly finished materials. As a result of these measures, Company will be able to increase its market share and profitability.

• Companies' manufacturing facility is located at Howrah, West Bengal which has an existing installed capacity of 30,000 MT per year.

PROCESS FLOWCHART 3

FURNACE

SODIUM SILICATE GLASS

LOADED IN DIGESTOR WITH WATER

FILTER TANK

PROCESSING TANK

Mixing Of Raw Material

QUALITY CHECK

PACKING

DISPATCH TO CUSTOMER

OBJECTIVES OF THE ISSUE 4

OBJECTS AMOUNT ALLOCATED IN RS.

For Meeting Working Capital Requirements 5.38 Cr

For Meeting General Corporate Expense 1.60 Cr

For Meeting Public Issue Expense 0.74 Cr

Issue Proceeds 7.73 Cr

ISSUE HIGHLIGHTS 5

IPO DETAILS

Issue Size (No of Share) 27,60,000

Fresh Issue (No of Share) 27,60,000

Issue Size In Rs 7.73 Cr

Face Value Rs.10

Issue Price Rs. 28

Post Issue No Of Share 1,02,38,125

Post Issue Paid Up Capital 10.24Cr

Post Issue Implied Market Cap

28.67 Cr

SHARE HOLDING PATTERN PRE IPO POST IPO

Promoter Holding 85.13% 62.18%

Public Holding 14.87% 37.82%

BID LOT

RII 4000

Other Then RII 8000 & in multiples of 4000 thereof

ISSUE OPENS 26 February 2018

ISSUE CLOSES 28 February 2018

LISTING ON NSE Emerge

LEAD MANAGER TO THE ISSUE

Hem Securities Limited

REGISTRAR TO THE ISSUE

Link Intime India Private Limited

RESERVATION FOR NO OF SHARE

Market Maker 1,44,000

RII 13,08,000

Other Then RII 13,08,000

NO OF SHARES

Pre Issue 74,78,125

Post Issue 1,02,38,125

PRODUCT PROFILE 6

Products Features

Water Proofing Compounds

They are used for plastering of walls, tanks, instant leak plugging, rapid hardening for basement and tunnels, stop running water from walls, dams etc.

Concrete & Mortar Admixtures

This is used for concrete floor slabs, foundation, columns, beams, ceilings, shotcreting etc.

Concreting Aids

This is used for shutter release agents for steel & wooden framework before concreting for high strength concreting, to prevent corrosion anodically as well as cathodically, for protection of reinforcement embedded in concrete.

Sodium Silicate This is used as a binder in soap, as a paste in Card Board, as a quoting in electrodes have different uses in textile, Pharmaceuticals, Dams, Canals, Road, & Water Proofing.

PRODUCT PROFILE 7

Products Features

Protective & Waterproofing Coating / Sheeting

The uses include prevention of corrosion of all types, to arrest seepage and dampness, waterproofing for roofs, gardens, pool, to provide coating for insulating solar heat, used over concrete substrates as primer for waterproofing, long lasting protection of stone.

Grouts & Repairing Mortars

This is used for injection into cracks in concrete to stop flow of moving water and for filling up the wall and floor joints in residential and building structures.

Shot Crete Aids This products is used as accelerating admixture for dry shotcreting.

Floor Toppings This is used for concreting floors, anti skid warehouse, runway, heavy traffic areas, for coating before applying high build epoxy coating on steel & concrete surfaces.

PRODUCT PROFILE 8

Products Features

Sealants This is used as sealants for fine cracks in structural membranes, tile joints, metal joints, holes, for sealing of vertical & horizontal expansion joints,

Tile Adhesives

They are used for permanent fixing of ceramic tiles/marble, vitreous, semi-vitreous tile, porcelain, glass mosaic tiles, precast terrazzo, engineered stone and natural stones over concrete.

Epoxy Grout & mortar

They are used for pressure injections into concrete, as primer on cement, stone, concrete, fixing insert plates, foundation bolts, tie bars, food processing plants, interior verticals.

Foundry Aid This product is used for concrete admixtures, pesticides, foundries, leather tanning, drilling fluid and mud and paper cutting chemicals.

PRODUCT PROFILE 9

Products Features

Coating/ Impregnation

This product is used to get exposed aggregate finish on concrete face.

Remover / Cleaning Compounds

This is used to remove rust from steel reinforcement, and other steel section embedded in concrete.

Expansion & Contraction Joint System

They are used in construction and cold joints, water retaining structures, water retaining structures, tunnel, sewage treatment plant.

CLIENTELE STRENGTH 10

STRONG MANAGEMENT TEAM 11

Mrs. Nilima Goenka, Executive Director, Promoter

• She has over 20 years of experience in Administration and Human Resource Management.

• She is entrusted with the responsibility to oversee administration and Human Resource function in the Company.

Mr. Sanjay Goenka, Managing Director, Promoter • He has over 25 years of experience in the business of construction chemicals and

cement additives. • He had been awarded with “National Award – 2010” in the year 2011 from

Ministry of Micro, Small & Medium Enterprises for Outstanding Entrepreneurship. • He has played a pivotal role in setting up of business of Company and is responsible

for the overall management and expansion of Company.

INDUSTRY OUTLOOK 12

• Construction industry in India is growing in excess of 16% p.a. and is likely to reach $ 100 billion by the end of the XIIth Five Year Plan period.

• The construction chemical industry in India accounts for only 0.4% of the total construction spend and has a potential of reaching 1% which is the norm in developed economies.

• The key products for this sector would be in the areas of painting and coating materials, reinforcing fibers, admixtures and other construction chemicals.

• The key success factor for construction chemical industry would be developing products and adopting advanced coating, ceiling and reinforcing material like polyurethane base coating, silicone base and polymer base re-enforcing material.

• Compared to the developed world (The US, Europe) or China, the current penetration of specialty chemicals within India’s end markets is low. With an increased focus on improving products, usage intensity of specialty chemicals within these end markets will rise in India over the next decade.

• Government target to increase the share of manufacturing in GDP to at least 25% by 2025 (from current 16%). Investments in manufacturing in the chemical sector are absolutely essential to ensure growth of the Indian chemical industry. Government's proposal to set up of a technology up-gradation fund of ~USD 80 Mn in the 12th plan for chemicals.

COMPETITORS ANALYSIS 13

Face Value EPS PE RONW (%) NAV Per Share

Pidilite Industries Limited 1 17.07 51.85 24.80 75.95

BASF India Limited 10 51.53 41.11 -1.11 294.48

Hindcon Chemicals Limited 10 5.46 6.55 13.76 176.63

-10

20

50

80

110

140

170

200

230

260

290

REVENUE STATEMENT 14

Particulars Amount In (Rs. Cr) As At

30-09-2017 31-3-2017 31-3-2016 31-3-2015 31-3-2014

Revenue 17.27 33.94 33.36 34.91 30.89

Expenditure 14.76 30.38 31.25 33.44 29.67

Operating Profit 2.51 3.56 2.11 1.46 1.22

Operating Profit Margin % 14.53 10.50 6.32 4.19 3.95

Other Income 0.86 0.31 0.10 0.06 0.09

Depreciation 0.07 0.18 0.21 0.27 0.14

EBIT 3.30 3.69 1.99 1.26 1.17

Interest 0.35 0.61 0.68 0.75 0.65

PBT 2.94 3.07 1.31 0.51 0.52

Tax 0.75 1.02 0.44 0.16 0.16

PAT 2.19 2.06 0.86 0.34 0.36

NPM % 12.67 6.07 2.58 0.99 1.17

BALANCE SHEET 15

Particulars Amount In (Rs. Cr) As At

30-09-2017 31-3-2017 31-3-2016 31-3-2015 31-3-2014 31-3-2013

LIABILITIES

Share Capital 7.48 1.50 1.50 1.50 1.50 1.50

Reserves & Surplus 9.56 13.36 11.30 10.44 10.10 9.75

Net worth 17.04 14.85 12.79 11.93 11.59 11.25

Non Current Liabilities

- Long Term Borrowings 0.005 0.02 0.05 - 0.006 0.10

- Deferred Tax Liabilities 0.003 0.001

- Long Term Provision 0.01 - - - - 0.003

Current Liabilities 12.5 10.75 11.39 13.25 9.07 10.08

Total Liabilities 29.56 25.62 24.23 25.18 20.67 21.43

ASSETS

Non Current Assets

- Fixed Assets 1.06 1.11 0.92 0.93 0.99 1.13

- Non Current Investments 2.99 1.2 1.05 0.67 0.54 0.5

- Long Term Loans and Advances 0.41 0.41 0.38 0.14 0.1 0.03

- Deferred tax assets (Net) 0.07 0.06 0.06 0.04 - -

- Other Non Current Assets - - - - 0.07 0.03

Current Assets 25.03 22.84 21.82 23.4 18.97 19.74

Total Assets 29.56 25.62 24.23 25.18 20.67 21.43

FINANCIAL RATIOS 16

Particulars For Year Ended 31st March

30-09-2017* 2017 2016 2015 2014

Return on Net worth (%) 12.84 13.86 6.74 2.89 2.98

EBITDA Margin (%) 14.53 10.50 6.32 4.19 3.95

Current Ratio 2.00 2.12 1.92 1.77 2.09

Restated Basic and Diluted EPS 2.93 2.75 1.15 0.46 0.46

Net Asset Value Per Share (in Rs.) 22.79 99.32 85.55 79.78 77.50

*Figures are not annualized.

STRONG GROWTH IN REVENUE 17

2014 2015 2016 2017

Revenue 30.89 34.91 33.36 33.94

28

29

30

31

32

33

34

35

36Revenue Trend

In Rs Crore

STRONG GROWTH IN EBIDTA 18

2014 2015 2016 2017

EBIDTA 1.26 1.47 2.1 3.55

0

0.5

1

1.5

2

2.5

3

3.5

4

EBIDTA

In Rs Crore

STRONG GROWTH IN PAT 19

2014 2015 2016 2017

PAT 0.36 0.35 0.87 2.05

0

0.5

1

1.5

2

2.5

PAT

In Rs Crore

STRONG FINANCIAL PERFORMANCE 20

Revenue

Profit After Tax

2.38%

54.48%

CAGR (4 Years FY 14 – FY 17)

EBITDA 29.56%

INVESTMENT RATIONALE 21

Valuation: Company is bringing the issue at a P/E multiple of 6.55 on post issue annualized H1FY18 EPS, at a price of Rs 28/- per Share while peers like Pidilite Industries, BASF, Gillanders Arbhuthnot & Co are trading at P/E multiple of more than 30.

Wide range of products: Co’s product portfolio includes Protective waterproofing coatings, Sodium Silicates, Concrete & mortar admixtures, Epoxy grouts & mortars , Waterproofing compounds ,shot crete aids ,remover cleaning compounds ,Sealants, tile adhesives etc.

Strong Client Base: Company’s clientele include names like Larsen & Toubro Ltd, Gammon India Ltd, BGR Energy Systems Ltd, Hindustan Construction Company Ltd, Jaiprakash Associates Ltd, Patel Engineering Ltd, SEW Infrastructure Ltd.

Awards & Recognitions: Company has received award for outstanding Export Performer at the 13th Federation of Small & Medium Industries(FOSMI) Award programme held in year 2015 and 1st prize in the category of “Outstanding Industrial Enterprise” at the 11th Federation of Small & Medium Industries (FOSMI) Award programme held in year 2012. Company has also received 3rd prize in the category of “Outstanding Industrial Enterprise” at the 10th Federation of Small & Medium Industries (FOSMI) Award programme held in year 2010.

Certifications: Company is ISO 9001: 2015 and ISO 22716 : 2007 accredited and has obtained licence from Bureau of Indian Standards to use the Standard Mark IS 9103 : 1999 for Concrete Admixture, Super Plasticiser Type –tiles etc.

REACH US 22

Disclaimer: * For additional information & risk factors please refer to Prospectus. • This document is provided for assistance only and not intended to be taken alone for the basis for an investment decision. • Our presentation/proposal may include predictions, estimates, management opinions or other information that might be considered

forward-looking. These forward-looking statements represent our current judgment on the future, they are subject to risks and uncertainties that could cause actual results to differ materially. Such forward-looking statements are subject to risks and uncertainties like regulatory changes, local political or economic developments, and many other factors that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements.

• Hem Securities Limited will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

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‘VASHUDHA’ 62 B, BRAUNFELD ROW, KOLKATA-700 027 Tel: 9133 24490835 / 39 Website: www. hindcon.com