Tirupati Graphite (TGR) - Technically Capable And in Revenue

April 5 2021, 11:35 GMT+01:00

Tirupati Graphite

  • LON: TGR
  • Shares Outstanding: 74.8M
  • Share price GBP£1.02 (18.03.2021)
  • Market Cap: GBP£76.7M

Tirupati Graphite is the benchmark in the flake graphite industry worldwide as is fully integrated from mine to graphene. Tirupati Graphite has global multi-location resources and operations and state of art facilities which make products for conventional and new applications. Tirupati Graphite is developing technologies and expertise through design, engineering, research and development.

We recently spoke with Shishir Poddar, executive chairman and managing director of Tirupati Graphite, a Mumbai-based mineral company. He shared some recent news and explored some of the firm’s exciting potential, especially in the emerging green energy space.

Company Overview

Tirupati Graphite is a fully integrated, revenue generative, graphite producer and graphene developer with operations in Madagascar and India. They are a global leader in the flake graphite market, servicing a variety of industries including electrical, nuclear, solar, refractory, lubrication and energy battery storage. They are firmly committed to the green energy revolution, with over 50% of their annual revenues coming from products that contribute to the global green economy.Tirupati Graphite (TGR) - Technically Capable And in Revenue

Graphite and Graphene: Special Minerals

Graphite and graphene are special minerals, according to Poddar.  The importance of graphite has increased dramatically around the globe because its properties are critical to many of the technologies needed in the emerging green energy sector.  He goes on to say that these minerals “help us reduce our carbon emissions, which would help us meet our Paris Accord targets, which would help us reduce our environment pollutants substantially”.

Many people have heard of graphite, but not graphene. Poddar explains that graphene is a single atom layer of Graphite atoms. As he likes to say: “If Graphite is a book, Graphene is a page in the book. What that means is that Graphite is a bundle of carbon atoms arranged in a hexagonal lattice in a panel form”.

The graphene layer significantly enhances the many useful properties of graphite. He sums it up with by saying that’s what Tirupati is all about: Building a company that will be a benchmark in the field of graphite, graphene and their technologies.Tirupati Graphite (TGR) - Technically Capable And in Revenue

Insights on How this Company Developed

Poddar establishes a London-based entity as one of the first part of building up this enterprise. This was so that the firm would have the visibility, access, and the investor base to become a leading company.

His knowledge led him to conclude that Madagascar was the best place on Earth to mine high-quality primary graphite ore. With their Madagascar asset as the first leg of the value chain, he then turned his focus on the specialty graphite and graphene components of the value chain, which are handled in their India assets.Tirupati Graphite (TGR) - Technically Capable And in Revenue

Graphite and Graphene: Market Size

Graphite has a current global market of between 1.2Mt and 1.3 Mt.  From this whole, there are currently about 150 separate industrial and technological applications, with more in the pipeline. Depending on the quality, graphite sells from a $100/t to S10,000/t. The growth expectation remains high, according to Poddar.

On the graphene side, we are talking about a relatively new material. For the past 15 years, it has been evolving into the global marketplace. The market size today for graphene is less than 100Mt/year, but it is projected to grow to +1Bnt over the next 3 to 4 years. That's the kind of ecosystem in which Tirupati Graphite is working.

Principal Producers and Consumers

China produces more than 70% of the world's graphite and has been doing so for the last 3 decades. As far a graphene goes, it still early and a top dog is not yet evident, although Manchester is one of the global growth centers. Some of the bigger company names in graphite hail fro, Belgium and Germany, but Tirupati Graphite is moving up in ranking as well.

Consumption is on the upswing all across the globe. The green revolution is responsible for that.Tirupati Graphite (TGR) - Technically Capable And in Revenue

A Bit About Shishir Poddar

The executive chairman, Poddar, has worked in the graphite business for his whole professional life. In fact, he’s second-generation; his father was one of the pioneers in graphite in India. Poddar first and foremost considers himself to be an entrepreneur, and for the last 15 years he has been building a leading global graphite business.

Apart from Poddar, the extended team consists of specialists in various areas. Tirupati has 3 legs to the core business and therefore has 3 authorities for each of these business components. In total, they boast 150+ years of successful graphite enterprise. Poddar argues that there is no company like that in the graphite business world.

How Do You Make Investors Comfortable?

In the first place, according to Poddar, the investor must realize that graphite in not a bulk mineral but instead a niche mineral.  Because of their century and a half cumulative experience at in leadership positions, Tirupati Graphite understands graphite, how to sell graphite, how to understand customer expectations, and how to process graphite so that it is the most value accretive. They also know how to assist their customers with their technical needs.

All of this “comes as a basket”, he says, and an investor needs to understand the value in that. Some of this includes being:

  •   The lowest-quartile CAPEX intensity graphite developer
  •   Possibly the lowest cost OPEX company in the graphite space

Mr. Poddar believes that keeping costs ultra low relative to the firm’s revenues creates a value gap for Tirupati investors.

Business Highlights

Being an important cog in the green energy space suggests that rapid growth is probable, and is supported by Poddar’s remarks.  They have shown that they can produce, sell, and meet expected requirements. Nonetheless, the company is still small and almost in a pilot phase.

Poddar points out to investors that the ecosystem of the graphite market as a material is very important to understand. It has market barriers as far as users are concerned, it has a qualification period, a growth period. Tirupati had planned a development with those factors in mind.

At the moment, Tirupati Graphite is producing revenues of between US$4 to $5M. Their Indian plant is producing a top line of US$2-$3M. Another facility is also contributing about US$2-3M in revenue.

The Madagascar operation is instructive, says Poddar: “We have 2 projects. The 1st is a Greenfield, the 2nd a Brownfield that we acquired from an old operation. We rebuild that project immediately upon acquisition. That started giving us revenue and gave us the opportunity to prove our abilities and we are doing that consistently with success. In fact, throughout the pandemic we were operating in Madagascar. You will seldom find companies that were able to do that”. They are continuing to build and upgrade the Madagascar operation.

Additionally, Tirupati likes operating in Madagascar. It is possibly one of the only countries in Africa that provides 40-year-long mining permits. It provides all the authorities under the code as a permit holder to set up a project. Of prime importance, it has a very reasonable, ~2% royalty on production.

On the specialty graphite side, they built their first 1,200t, specialist flame retardant graphite plant and commissioned it at 1.5-years back. From that, Tirupati Graphite is selling trademarked flame-retardant expandable Graphite composites to Indian and other Asian customers. They have approval from European customers.

There is tremendous excitement on the on the graphene side. Tirupati Graphite has developed a novel way to to manufacture and commercialize Graphene using a unique, zero chemical process. These graphene samples have gone world over.

Throughout the development and growth of its assets, Tirupati has consulted with third-party stakeholders to ensure things are being done right. For example, they are working with SRK Consulting for their next phase of exploration in Madagascar.Tirupati Graphite (TGR) - Technically Capable And in Revenue

What About Competition from Synthetics?

Potential investors may be concerned about the threat from synthetic graphite. Not to worry, says Poddar: “95% of applications of flake Graphite cannot be replaced by synthetic”. The production of synthetic graphics is immensely energy intensive and expensive. The whole concept to green energy is thrown out the window if it needs to use synthetic graphite, according to Poddar.

Current Client Base

Poddar wanted to emphasize Tirupati Graphite already has a solid exiting customer base, with clients across the globe. The customer base come for Asia, Europe and the Americas, and is widely diversified across numerous industries. In fact, he says that the customer base can consume graphite at a much higher rate than they are currently selling. They are particularly looking to expand their sales in the spherical graphite space. He is confident that this portends rapid growth going forward.

A Mining Company or an Industrial Metals Firm?

Investors might be confused about whether Tirupati is a mining company or an industrial metals company. Perhaps it's a bit of both and perhaps it doesn’t matter.

In the honeymoon phase of their public listing, the firm is appearing to fire on all cylinders in the graphite space and is poised to take increasing advantage in the burgeoning green energy ecosystem. Tirupati makes graphite products for every application in modern society. According to Poddar, “No other company has the understanding know-how to make this array of products”.

To find out more, go Tirupati Graphite's Website.

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