Speciality Chemicals Co Prasol files for Rs 800 crore IPO

Large bouquet of chemicals from home to industry applications

Speciality Chemicals Co Prasol files for Rs 800 crore IPO

Combo of Rs 250 cr fresh issue & OFS of 90 lk shares

Prasol Chemicals is profit making company with marquee client roster

MUMBAI, Apr 14 (The CONNECT) - Mumbai-based Prasol Chemicals Limited has filed its draft red herring prospectus (DRHP) for its initial public offering (IPO) with the market regulator SEBI and market sources say the company targets to raise around Rs 700-800 crore.

The IPO with a face value of Rs 2 per equity share comprises fresh issue of aggregating up to Rs 250 crore and an offer-for-sale (OFS) of up to 9,000,000 equity shares by existing shareholders.

The company, in consultation with the lead bankers to the issue may consider a further issue of equity shares aggregating up to Rs 50 crore. If such placement is completed, the fresh issue size will be reduced.

The proceeds from the fresh issue will be utilised to the tune of Rs 160 crore for debt payments, Rs 30 cr for working capital requirements and for general corporate purposes.

Since its inception, Prasol Chemicals has expanded its business and scope of operations, evolving from a small-scale manufacturer to a big diversified specialty chemical company with a global presence. The Government of India-accredited Two Star Export House Company has a global distribution network spanning 45 countries across Asia, North America, and the European Union.

Several acetone and phosphorus derivatives from Prasol’s portfolio are used in pharmaceuticals, synthesis of agrochemical active technical ingredients and formulations. Its application also form a critical raw material in home and personal care products such as sunscreens, shampoos, flavors, fragrances and disinfectants.

Prasol has a portfolio of more than 140 products and 32 are in pipeline.

Prasol has established relationships with clients such as PI Industries Limited, Bayer CropScience Limited, Solvay Specialities India Private Limited, Proctor & Gamble, Dr. Reddy's Laboratories Limited, Alembic Pharmaceuticals Limited, Coromandel International Limited, Arkema, Lubrizol India Private Limited, UPL Limited, Olon Active Pharmaceutical Ingredients India Private Limited, MSN Laboratories Private Limited, Oriental Aromatics Limited, Asian Paints Limited and others through decades of association, collaborative efforts through research and development of new and customised additives, and by undertaking synergetic business opportunities and from industry experience.

The company clocked a profit of Rs 50.10 crore in the nine-month period ended December 2021 against Rs 25.08 crore and Rs 37.77 crore in FY21 and FY 20 respectively, which were impacted by Covid-19, whereas revenue from operations was Rs 626.93 crore for the nine-month period ended Dec 2021 against Rs 595.54 crore in fiscal 2021 and Rs 531.24 crore in fiscal 2020. As on Dec 2021, Export sales contribute 21.24% of its revenues and Top 10 clients contribute 17.78%.

The Indian chemicals sector accounts for about 3% of the worldwide chemicals market. It is currently ranked sixth in the world and fourth in Asia. In addition, the country ranks eighth in worldwide chemical exports (excluding pharmaceutical items) and seventh in global chemical imports (excluding pharmaceutical products). Due to increased demand from end-user sectors, as well as constrained global supply due to China's strict environmental regulations, India's specialty chemicals industry is predicted to grow at a 10-12 percent CAGR between 2021 and 2026.

JM Financial Limited and DAM Capital Advisors Limited are the book-running lead managers and Kfin Technologies is the registrar to the offer.

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