Initial public offering of [●] equity shares of face value of ₹ 2 each (“Equity Shares”) of Rossari Biotech Limited
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. Edw ard 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.
CHENNAI, July 8, 2020: Rossari Biotech Limited, a leading specialty chemicals manufacturer (Source: F&S Re port) 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 be will be completed, on July 10, 20 20, 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”) th rough book building process wherein not less than 15% of the Offer shall be available for allocation on a pr op ortionate 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 pr oposed 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 thr ough the RHP shall be listed on National Stock Exc hange 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 af ter tax of ₹ 652.53 million. Over the last 3 years, it has managed to clock a compounded annual growth rate of 4 1.65% 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, prepa red 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 manuf ac turer of acrylic polymers in India. As stated in the RHP, the Company plans to venture into construction chemi cals market and water treatment formulations market. The global specialty chemicals market cumulatively con st itutes 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, parti cularly 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 overv iew 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 activit ies in India. (Source: F&S Report).
About Rossari Biotech Limited
Founded in 2009, Rossari Biotech Limited is one of the leading specialty chemicals manufacturing companies in India based on sales for Fiscal 2019 (Source: F&S Report), providing customized solutions to specific industrial and produc tion requirements of its customers primarily in the FMCG, apparel, poultry and animal feed industries through their dive rsified product portfolio comprising home, personal care and performance chemicals; textile specialty chemicals; and animal health and nutrition products.
The Company operates in India as well as in 17 foreign countries including Vietnam, Bangladesh and Mauritius. Accor ding to the F&S Report, as on September 30, 2019, Rossari Biotech Limited is the largest manufacturer of textile spe cia lty chemicals in India providing textile specialty chemicals in a sustainable, eco-friendly yet competitive manner. As a ma nufacturer of specialty chemicals, the Company focuses on functionality and application of their products which form a key ingredient to its customers’ manufacturing and industrial processes.
Disclaimer:
Rossari Biotech Limited is proposing, subject to receipt of requisite approvals, market conditions and other conside rat ions, to make an initial public offer of its Equity Shares and has filed the RHP with the Securities and Exchange Board of India (“SEBI”) and the RoC. The RHP is available on the website of the SEBI at www.sebi.gov.in as well as on the websites of the book running lead managers, Axis Capital Limited and ICICI Securities Limited at www.axiscapital.co.in and www.icicisecurities.com, respectively. Investors should note that investment in equity shares involves a high degree of risk and for details relating to such risks, see “Risk Factors” on page 24 of the RHP. Potential investors should not rely on the DRHP for making any investment decision.
The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Sec urities Act”) or any state securities laws in the United States, and unless so registered, may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any applicable U.S. state securities laws. The Equity Shares are being offered and sold outside the United States in offshore transactions in reliance on Regulation S under the Securities Act and the applicable laws of the jurisdictions where such offers and sales are made. There will be no public offering in the United States.
It is to be distinctly understood that the permission given by BSE Limited should not in any way be deemed or construed that the Red Herring Prospectus has been cleared or approved by BSE Limited nor does it certify the correctness or comp leteness of any of the contents of the Red Herring Prospectus. The investors are advised to the Red Herring Prospectus for the full text of the Disclaimer clause of the BSE Limited. It is to be distinctly understood that the permission given by NSE should not in any way be deemed or construed that the Offer Document has been cleared or approved by NSE nor does it certify the correctness or completeness of any of the contents of the Offer Document. The investors are advised to refer to the Offer Document for the full text of the Disclaimer clause of NSE.
F&S has required us to include the following disclaimer in connection with the F&S Report:
“The market research process for this study has been undertaken thorough secondary / desktop research as well as prim ary research, which involves discussing the status of the market with leading participants and experts. The research me thodology used is the Expert Opinion Methodology. Quantitative market information was sourced from interviews by way of primary research as well as from trusted portals, and therefore, the information is subject to fluctuations due to possible changes in the business and market climate. Frost & Sullivan’s estimates and assumptions are based on varying levels of quantitative and qualitative analyses, including industry journals, company reports and information in the public domain.
Forecasts, estimates, predictions, and other forward-looking statements contained in this report are inherently unc ert ain because of changes in factors underlying their assumptions, or events or combinations of events that cannot be re asonably foreseen. Actual results and future events could differ materially from such forecasts, estimates, predictions, or such statements. This study has been prepared for inclusion in the draft red herring prospectus, red herring prospectus and the prospectus of “Rossari Biotech Limited” in relation to an initial public offering in connection with its listing on Indian stock exchanges.
This report and extracts thereof are for use in the draft red herring prospectus, red herring prospectus and the pros pe ctus issued by the Company and all presentation materials (including press releases) prepared by or on behalf of the Co mpany (and reviewed by Frost & Sullivan) in relation to the listing exercise. The company is permitted to use the same in internal and external communications as needed in the context of the Listing exercise. However, no part of the report may be distributed for any other commercial gain to parties not connected with the said Listing exercise.
This report has exclusively been prepared for the consumption of “Rossari Biotech Limited”, and any unauthorised access to or usage of this material by others is forbidden and illegal.
Frost & Sullivan has prepared this study in an independent and objective manner, and it has taken adequate care to en sure its accuracy and completeness. We believe that this study presents a true and fair view of the global and Indian sp ecialty chemicals industry within the limitations of, among others, secondary statistics and primary research, and it does not purport to be exhaustive. Our research has been conducted with an “overall industry” perspective, and it will not necessarily reflect the performance of individual companies in the industry. Frost & Sullivan shall not be liable for any loss suffered because of reliance on the information contained in this study. This study should also not be considered as a recommendation to buy or not to buy the shares of any company or companies as mentioned in it or otherwise.”
