Ashish Kacholia, Madhulika Agarwal And Vanaja Sundar Iyer Are bullish about TANFAC, a small-cap specialty chemical co. Stock is multibagger with 150% YoY return & 985% return in 5 years

About Tanfac Industries

Tanfac Industries Limited (Tanfac) is a joint-sector company promoted by Anupam Rasayan India Limited (Anupam Rasayan) and Tamil Nadu Development Corporation (TIDCO). It began commercial production in March 1985 and is among the leading producers of hydrofluoric acid and its derivatives. It is engaged in the manufacture of chemicals including anhydrous hydrofluoric acid, sulphuric acid, oleum, aluminium fluoride, potassium fluoride, potassium bifluoride among others.

Anupam Rasayan is one of the largest users of potassium fluoride (KF) in India. Over the years, the Company has gained requisite skill set, technical expertise and know-how to handle KF as a fluorinating agent, which gives it the confidence to develop hydrogen fluoride (HF) products that have varied applications in industries such as agro, pharma and polymers.

• 24.96% voting share capital acquired from the sellers Aditya Birla Group for the consideration of H 148 crore (on March 11, 2022) and

• 0.83% voting share capital of Tanfac at a consideration of H 49.55 crore from the public shareholders through an Open Offer floated by the Company, in compliance with the SEBI (SAST) Regulations (completed on May 20, 2022)

• The lower percentage of shares tendered by the public shareholders during the Open Offer period is indicative of the trust investors place in Anupam Rasayan Management’s capability to enhance the value of their investment

TANFAC caters to the diverse needs of the market through its manufacturing facilities spread over 60 acres in the chemical complex of SIPCOT Industrial Estate, Cuddalore, 200 km south of Chennai. Its infrastructure incorporates cutting-edge technology sourced from BUSS Chemtech in Switzerland and CHENCO in Germany. It has implemented international safety systems and practices to ensure safety across its operations. It has robust manufacturing, superior-quality products and ongoing enhancement initiatives.

The Company is debt-free with EBITDA margin of 22% & RoE of 56%. It has invested Rs 100 crore in expansion of production facilities.

About Hydrofluoric Acid

Hydrofluoric Acid (HF) is a versatile chemical used across a spectrum of industries, including refrigerants, stainless steel, solar cells, electronics, intermediates for pharmaceuticals and agro products. As market demands for these industries grow, ensuring a stable and sufficient supply of HF becomes paramount. Recognising this, Tanfac, a veteran and reputable player in the chemical manufacturing sector, presented a plan to expand its existing HF plant to achieve an annual production capacity of 14,500 MTPA. The expansion will bridge the gap between supply and demand, preventing potential shortages that could hinder industrial progress.

Shareholding of Tanfac Industries

The Co is a small-cap with a full market capitalisation of Rs 2300 crore and a free float of Rs 1060 crore.

The promoters hold 51.81% of the equity capital while the public holds 48.19%. Amongst the public, three HNIs dominate the holding:

It is well known that Madhulika Agarwal is the wife of Mukul Agrawal and his alter ego in matters of investment.

The Stock is a glorious multibagger with 150% YoY return & 985% return in 5 years.