Initial public offering of up to [●] equity shares of face value of ₹ 10 each (“Equity Shares”) of Chemcon Speciality
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.
Chennai, September 18, 2020: 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 Sept ember 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 Chlo ro methyl 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 Rep ort, 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 Phar maceuticals 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 prod ucts 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.
About Chemcon:
Chemcon is an ISO 9001:2015 and ISO 14001:2015 certified company for the “Manufacture and supply of pha rmaceutical intermediates, silanes and oilfield chemicals”. The Company is a leading manufacturer globally of the Pharmaceutical Chemicals and a leading manufacturer in India of the Oilwell Completion Chemicals as per the Frost & Sullivan Report. The Company is a manufacturer of specialised chemicals, such as HMDS and CMIC which are predominantly used in the pharmaceuticals industry (the “Pharmaceutical Chemicals”), and inorganic bromides, namely Calcium Bromide, Zinc Bromide and Sodium Bromide, which are predominantly used as com pletion fluids in the oilfields industry (the “Oilwell Completion Chemicals”).Its manufacturing facility is loc ated at Manjusar near Vadodara in Gujarat and spread across approximately 29,000 square metres. Its Corp orate Office is located in Vadodara and their sales and marketing offices are located in Hyderabad and Mohali. The Manufacturing Facility currently comprises of seven individual operational plants (the “Operational Plants”), each dedicated to the manufacturing of specific products of the Company. The aggregate volumetric reactor capacity of these seven Operational Plants was 374.85 KL as on July 31, 2020.The Company was the only ma nufacturer of HMDS in India and was the third largest manufacturer of HMDS worldwide in terms of producti on in the calendar year 2019 (source: Frost & Sullivan Report). The Company was the largest manufacturer of CMIC in India and the second largest manufacturer of CMIC worldwide, in terms of production and capacity in calendar year 2019 (source: Frost & Sullivan Report). Further, the Company was the only manufacturer of Zinc Bromide and the largest manufacturer of Calcium Bromide in India, in terms of production in calendar year 2019 (source: Frost & Sullivan Report).
Disclaimer:
CHEMCON SPECIALITY CHEMICALS LIMITED is proposing, subject to receipt of requisite approvals, market conditions and other considerations, to make an initial public offer of its Equity Shares and has filed the Red Herring Prospectus with the RoC, Gujarat, Dadra and Nagar Haveli at Ahmedabad. The RHP is available on the website of the SEBI at www.sebi.gov.in, on the respective websites of the BSE and the NSE, at www.bseindia.com and nseindia.com as well as on the websites of the book running lead managers, Intensive Fiscal Services Private Limited and Ambit Capital Private Limited at www.intensivefiscal.com and www.ambit.co, respectively. Invest ors 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 23 of the RHP. Potential investors should not rely on the DRHP for making any investment decision. This announcement has been prepared for publication in India and may not be released in the United States. This announcement does not constitute an offer of securities for sale in any jurisdiction, including the United States, and any securities described in this announcement may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933 or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the Company and that will contain detailed information about the Company and management, as well as financial statements. However, the securities described in this announcement are not being offered or sold in the United States.
All capitalised terms used herein, but not specifically defined, shall have the same meaning ascribed to them in the Red Herring Prospectus dated September 12, 2020, filed by the Company.
