Vadodara based Chemcon Speciality Chemicals Limited set to open IPO
on September 21, 2020
· Minimum Bid Lot is 44 Equity Shares and in multiples of 44 Equity Shares thereafter
· Price Band of ₹ 338 – ₹ 340 per Equity Share
· Issue Opening Date – September 21, 2020* and Issue Closing Date – September 23, 2020
· The Floor Price is 33.8 times the Face Value of the Equity Shares and the Cap Price is 34 times the Face Value of the Equity Shares.
Initial public offering of up to [●] equity shares of face value of ₹ 10 each (“Equity Shares”) of Chemcon Speciality Chemicals limited (“ Company” or “Chemcon” the “Issuer”) for cash at a price of ₹[●] per Equity Share (including a premium of ₹[●] per Equity Share) (“Issue Price”) aggregating up to ₹[●] million. The Issue comprises of a fresh issue of up to [●] Equity Shares aggregating up to ₹1,650 million (“Fresh Issue”) and an offer for sale of up to 4,500,000 Equity Shares aggregating up to ₹[●] million, comprising of up to 2,250,000 Equity Shares by Kamalkumar Rajendra Aggarwal aggregating up to ₹ [●] million, and up to 2,250,000 Equity Shares by Naresh Vijaykumar Goyal aggregating up to ₹[●] million, (together, the “Selling Shareholders”) (the “Offer for Sale”, and together with the Fresh Issue, the “Issue”). The Issue will constitute [●] % of the post-Issue paid-up equity share capital of the Company.
Leading manufacturer of speciality chemicals, Chemcon Speciality Chemicals Limited will be opening its initial public offering for subscription on September 21, 2020* and will close on September 23, 2020 with a price band of ₹ 338 – ₹ 340 per Equity Share. Bids submitted by Anchor Investors will be submitted and allocated one Working Day prior to the Bid/Issue Opening Date, being September 18, 2020. The Company is a leading manufacturer of speciality chemicals such as Hexamethyldisilazane (HMDS) and Chloromethyl Isopropyl Carbonate (CMIC) which are chemicals predominately used in the pharmaceutical industry. It manufactures Inorganic Bromides used as completion fluids in the oilfield industry.
As per the Frost & Sullivan Report, the Company was the only manufacturer of HMDS in India and was the third largest manufacturer of HMDS in terms of production in CY 2019. Further, in terms of the Frost & Sullivan Report, the Company was the largest manufacturer in India and second largest manufacturer worldwide, for CMIC in terms of production in CY 2019. It has also recently developed 2 new products, namely 4-chlorobutyryl chloride (‘4CBC’) and 2,5 DHT (2,5-Dihydroxy-1,4-dithiane) and has already its executed first sale of 4 CBC in July 2020.
* The Company and the Selling Shareholders may, in consultation with the BRLMs, consider participation by Anchor Investors in accordance with the SEBI ICDR Regulations. The Anchor Investor Bidding Date shall be one Working Day prior to the Bid/Issue Opening Date, being September 18, 2020.
The Issue is being made through the book building process in accordance with Regulation 6(1) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended, where allocation to QIBs is not more than 50% of the Issue size, Non-Institutional Bidders is not less than 15% of the Issue size and Retail Individual Bidders is not less than 35% of the Issue size.
The Company has revenue from Operations of ₹ 262.05 crore with EBITDA of ₹ 70.26 crore and Profit after Tax is ₹ 48.85 crore in FY 2020. It has grown at a 29% CAGR in sales, 25% in EBITA and 36% in PAT between FY18 and FY20. As on March 31,2020 the total borrowings of the Company was ₹ 44.51 cr, while the debt equity ratio was 0.31.
Additionally, the company has long standing relationships with its key customers namely including Laurus Labs Limited , Hetero Labs Limited, Aurobindo Pharma Limited ,Macleods Pharmaceuticals Limited, Lantech Pharmaceuticals Limited, Vivin Drugs & Pharmaceuticals Limited , Ind-Swift Laboratories Limited, Water Systems Speciality Chemical DMCC, CC Gran Limited Liability Company, Shree Radha Overseas and also exports its products to global markets covering US, Germany, Italy, South Korea, People’s Republic of China, Japan, United Arab Emirates, Serbia, Russia, Spain, Thailand and Malaysia.
The Company intends to utilize the Net Proceeds from the Fresh Issue towards capital expenditure towards expansion of the Manufacturing Facility, To meet working capital requirements and towards general corporate purposes.
Intensive Fiscal Services Private Limited and Ambit Capital Private Limited are the BRLMs to the Issue.