Specialty Chemicals Manufacturer, Rossari’s IPO to open on July 13, 2020
Initial public offering of [●] equity shares of face value of ₹ 2 each (“Equity Shares”) of Rossari Biotech Limited (the “Company” or the “Issuer”) for cash at a price of ₹ [●] per Equity Share (including a share premium of ₹ [●] per Equity Share) aggregating up to ₹ [●] million comprising a fresh issue of [●] Equity Shares aggregating up to ₹ 500.00 million (the “Fresh Issue”) and an offer for sale of up to 10,500,000 Equity shares aggregating up to ₹ [●] million, comprising an offer for sale of up to 5,250,000 Equity Shares aggregating up to ₹ [●] million by Mr. Edward Menezes and up to 5,250,000 Equity Shares aggregating up to ₹ [●] million by Mr. Sunil Chari (the “Offer for Sale”, and together with the Fresh Issue, the “Offer”). The Offer shall constitute [●] % of the post-offer paid up Equity Share capital of the Company.
· Minimum Bid lot is 35 equity shares and in multiples of 35 Equity Shares thereafter
· Price Band of ₹ 423 – ₹ 425 per Equity Share
· Offer opening date – July 13, 2020 and Offer closing date – July 15, 2020
· The floor price is 211.50 times the face value of the Equity Shares and the cap price is 212.50 times the face value of the Equity Shares.
Rossari Biotech Limited, a leading specialty chemicals manufacturer (Source: F&S Report) focusing on home, personal care and performance chemicals will be launching its initial public offering on Monday, July 13, 2020 and will close on Wednesday, July 15, 2020, with a price band of ₹ 423 – ₹ 425 per Equity Share. Bids by anchor investors shall be submitted, and allocation to them will be completed on July 10, 2020, being one working day prior to the Offer opening date.
As mentioned in the red herring prospectus dated July 4, 2020 (“RHP"), filed by Company with the Registrar of Companies, Maharashtra at Mumbai (“RoC”), the Company raised ₹ 999.99 million in a private placement of 2,352,920 Equity Shares to various investors including Malabar India Fund Limited, Axis New Opportunities AIF-I , Mirae Asset Mid Cap Fund, Sundaram Mutual Fund A/C Sundaram Select Micro Cap Series - XIV, IIFL Special Opportunities Fund – Series 4 and ICICI Lombard General Insurance Company Limited (“Pre-IPO Placement”). The size of the fresh issue of up to ₹ 1,500 million has been reduced by ₹ 999.99 million pursuant to the Pre-IPO Placement, and accordingly, the size of the fresh issue is up to ₹ 500 million.
The Offer is being made in accordance with Regulation 19(2)b of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (“SEBI ICDR Regulations”) through book building process wherein not less than 15% of the Offer shall be available for allocation on a proportionate basis to non-institutional investors and not less than 35% of the Offer shall be available for allocation to retail individual investors in accordance with the SEBI ICDR Regulations.
The proceeds of the Fresh Issue (less the Offer expenses) and the proceeds from the Pre-IPO Placement are proposed to be utilized to repay/prepay borrowings availed by the Company of ₹ 650 million, to fund its working capital requirements of ₹ 500 million and towards general corporate purposes. The Company will not receive any proceeds from the Offer for Sale.
Axis Capital Limited and ICICI Securities Limited have been appointed as the book running lead managers to the Offer and Axcelus Finserv Private Limited was appointed as advisor to the Offer. The Equity Shares offered through the RHP shall be listed on National Stock Exchange of India Limited (“NSE”) and BSE Limited (“BSE”). Link Intime India Private Limited is the registrar to the Offer.
Additionally, in fiscal year 2020, the Company generated total revenues of ₹ 6,038.18 million and a net profit after tax of ₹ 652.53 million. Over the last 3 years, it has managed to clock a compounded annual growth rate of 41.65% for its revenues and a compounded annual growth rate of 60.27% for its profit after tax. The debt equity ratio of the company stood steady at 0.23 across fiscal years 2018-2020
According to the report titled “Global and Indian Specialty Chemicals Report” dated December 10, 2019, prepared by Frost & Sullivan (India) Private Limited (“F&S”, and such report, the “F&S Report"), the Company was the largest manufacturer of textile specialty chemicals in India as on September 30, 2019, and is a leading manufacturer of acrylic polymers in India. As stated in the RHP, the Company plans to venture into the construction chemicals market and water treatment formulations market. The global specialty chemicals market cumulatively constitutes a global market of approximately USD 237 billion in 2018 and is expected to grow at 5.4% per annum to reach approximately USD 308 billion by 2023. The Company’s presence in the specialty chemicals market, particularly in the home, personal care and performance chemicals; textile specialty chemicals; and animal health and nutrition products, presents significant growth opportunities due to the following factors: (i) demographic overview and rapid urbanisation leading to consumption growth, (ii) growing demand for environmentally sustainable chemicals and (iii) positive regulatory focus from the Indian governmental authorities on manufacturing activities in India. (Source: F&S Report).
