Another IPO coming your way: Chemspec Chemicals looks to raise ₹700 crore through public listing

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Another IPO coming your way: Chemspec Chemicals looks to raise ₹700 crore through public listing
BCCL
  • Chemspec Chemicals is looking to raise ₹700 crore through a complete offer for sale by promoters.
  • Chemspec Chemicals is one of the leading manufacturers globally of critical additives for FMCG ingredients used in skin and hair care products, and intermediates for active pharmaceutical ingredient (APIs) used in antihypertensive drugs.
  • The company exports products to 42 countries in North America, Europe, Asia Pacific region, the Middle East and Africa.
The year 2021 continues to witness a barrage of initial public offerings (IPO). Here is another, which is gearing up for a listing soon. The chemical manufacturing company filed a draft red herring prospectus (DRHP) on July 14.

A DRHP is filed when a company is planning to raise money from and it provides details about its business operations and financials.

The company is looking to raise ₹700 crore through a complete offer for sale (OFS) by existing promoters Bhaichand Amoluk Consultancy Services (₹233 crore), Mitul Vora (₹233 crore) and Rushabh Vora (₹233 crore).

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Chemspec Chemicals is one of the leading manufacturers, globally, of critical additives for fast moving consumer goods (FMCG) ingredients used in skin and hair care products, and intermediates for active pharmaceutical ingredient (APIs) used in antihypertensive drugs.

As part of its FMCG product portfolio, it manufactures active ingredients used in sunscreen lotions and creams, antibacterial soaps, anti-dandruff shampoos, and preservatives.

The Company is also the largest manufacturer of ‘piroctone olamine’ in India, and the largest producer of ‘chemilide’ (an antibacterial ingredient) in the world with an approximate market share of 70% market share.

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Its clientele include Beiersdorf AG, Unilever Supply Chain Company AG, L’Oreal, DSM Nutritional Products, Godrej Consumers Products, Glenmark Life Sciences, Dr. Reddy's Laboratories, CTX Lifesciences etc.

Over the years, the company has evolved from a local supplier to FMCG companies in India to a supplier to multinational FMCG companies in 43 countries across five continents. Revenue from such companies constituted 86.67%, 88.88% and 89.76% of total revenue from operations in FY21, FY20 and FY19 respectively.

The company manufactures these products at Taloja facility in Maharashtra.

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It has been exporting its products to 43 countries in North America, Europe, the Asia Pacific region (APAC) including Japan, the Middle East and Africa

ParticularsFY19FY20FY21
Revenue₹ 335 crore₹ 607 crore₹ 510 crore
Profit₹ 5 crore₹ 60 crore₹ 81 crore

The company’s peers including SRF, Vinati Organics, Galaxy Surfactants and so on have delivered good double digit returns in the last six months .

Peer companiesStock returns in Jan 2021-June 2021
Galaxy Surfactants50%
Vinati Organics50%
Aarti Industries38%
SRF27%
Fine Organic15%
PI Industries28%
Navin Fluorine42%

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