Tirupati will be London’s only pure-play, vertically integrated graphite producer

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  • Graphite production already in place
  • Further projects to be brought on stream
  • Upstream assets add value
  • Already generating cash

What Tirupati does


This is a company that’s been around for some time. It’s already mining, producing, processing and delivering high-end graphite to established customers, and is profitable at an operational level, although not yet at a group level.


Demand for graphite is likely to pick up in the coming years as the number of electric vehicle batteries that are manufactured continues to rise. It’s also used in flame-retardant materials, for composites and thermal management, markets which Tirupati is already addressing.


What’s the plan?


Now Tirupati is listed, the plan is to step operations up a gear at all levels and move rapidly to overall profitability.


The intention is to deploy significant sums on expanding production at the company’s key mines in Madagascar, the Vatomina and the Sahamamy projects, and preparing them for further expansion.


Sahamamy is already up and running and delivering margins of greater than 50%, and the Vatomina project will be brought on stream in two quarters post listing.


In February 2021, the company kicked off the next stage of its exploration and drilling programme has started across its primary flake graphite projects in Madagascar.


Across the Vatomina and Sahamamy projects over a period of six months, the company plans to carry out around 10,000 metres of auger drilling, roughly 1,000 metres of trenching and some 5,000 metres of diamond core drilling.


Meanwhile, in India, further sums have been earmarked to expand output at Tirupati’s downstream operations in the sub-continent, where production of speciality grade graphite will rise to 4,800 tonnes per year.


In addition to that, the company also plans to boost its graphene production capabilities, also in India.


What does the chief executive say?


“We’re currently profitable at the project level,” says chief executive Shishir Poddar. “Post-IPO we’ll be profitable at the corporate level too. We will build a company that will be a global leader in graphite and graphene.”


“In line with our rigorous step by step strategy, we continue to multitask work programmes and progress the development timelines of our primary flake graphite projects in Madagascar in a cost-effective and time-efficient manner across our portfolio,” Poddar told investors in February.


“With our in-house capabilities including a diamond core drilling rig and the expert geological team, we plan to deliver the additional exploration activities at industry-low costs, creating shareholder value on a continued basis,” Poddar added.


From the broker


According to research undertaken by broker Optiva, Tirupati looks set to generate initial sales of US$20mln and earnings of US$10mln, which in turn is likely to grow following the new investment – and the reinvestment of future cash flows – to around US$150mln in sales and US$80mln in earnings.


Accordingly, Optiva reckons the net present value of Tirupati at around GBP300mln, or GBP169mln fully risked, with an expected market capitalisation on listing of between GBP49mln and GBP56mln.

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