Balaji Speciality Chemicals files draft papers for IPO

• Balaji Speciality’s offer consists of a fresh issue of equity shares worth ₹250 crore.
• The company’s shareholders and promoters have proposed to sell up to 26 lakh equity shares.
• It intends to use the proceeds to repay ₹68 crore in debt and use ₹119.5 crore for working capital.

Solapur-based speciality chemical company Balaji Speciality Chemicals on August 12 filed its preliminary papers with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO).

Balaji Speciality Chemicals, in its draft red herring prospectus (DRHP), mentioned that the offer consists of a fresh issue of shares worth ₹250 crore and an offer-for-sale (OFS) of up to 26 lakh equity shares sold by the promoters and shareholders in the company.

Selling Shareholder	Type	Number of Equity Shares Up For Sale
Ande Prathap Reddy	Promoter Group	Up to 1,030,000 equity shares
Ande Srinivas Reddy	Promoter Group	Up to 5,600,000 equity shares
Ram Reddy Dundurapu	Promoter Group	Up to 1,900,000 equity shares
Rajeshwar Reddy Nomula	Promoter Group	Up to 2,300,000 equity shares
Gaddam Hemanth Reddy	Promoter Group	Up to 660,000 equity shares
Achanta Annapurna	Promoter Group	Up to 2,250,000 equity shares
Dundurapu Vandana Reddy	Promoter Group	Up to 2,000,000 equity shares

The company intends to use the proceeds from the issue to repay ₹68 crore in debt and use ₹119.5 crore for working capital and general corporate purposes. The company may also look to raise an additional ₹50 crore in a pre-IPO placement.

Incorporated in 2010, Balaji Speciality Chemicals is a subsidiary of Balaji Amines Ltd, which is the sole manufacturer of niche chemicals such as Ethylene Diamine (EDA), Piperazine Anhydrous (PIP), Diethylenetriamine (DETA), Aminoethyl ethanolamine (AEEA) and Aminoethyl Piperazine (AEP), using the MonoethanolAmine (MEA) process.

The chemicals manufactured by Balaji Speciality Chemicals is an import substitute and are used in various industries such as speciality chemicals, agrochemicals, and pharmaceuticals. Its key customers include Nanjing Union Chemical Co. Ltd, Korea India Ltd, UPL Ltd, Dr. Reddy's Laboratories Ltd and Aarti Drugs Ltd.

Its customer base has grown from 45 to 182 customers in the last two fiscal years, the company said.The company’s revenue from operations almost tripled to ₹514.28 crore in fiscal year 2022, from ₹174.4 crore a year ago. Its profit also grew 10 fold to ₹108.95 crore in FY2022 from ₹10.4 crore in FY2021.

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