Mumbai-based speciality chemicals company Prasol Chemicals, manufacturer of acetone derivatives and phosphorus derivatives in India, has filed a draft red herring prospectus (DRHP) with market regulator SEBI for an initial public offering (IPO). The initial share sale with a face value of Rs 2 per equity share comprises fresh issue of equity shares aggregating up to Rs 250 crore and an offer-for-sale (OFS) of up to 90 lakh equity shares by existing shareholders, per the DRHP. The company is likely to raise about Rs 700-800 crore from the IPO, according to market sources.
Back of the envelope calculations show that shares may be issued at up to about Rs 611 per piece, going by 90 lakh shares to be sold in OFS worth up to Rs 550 crore, excluding the fresh equity issue of Rs 250 crore. The OFS consists of up to 16.5 lakh shares by Usha Rajnikant Shah, upto 8.7 lakh shares by Nishith Rasiklal Dharia, upto 6.30 lakh by Gaurang Natwarlal Parikh, up to 5 lakh shares each by Bhisham Kumar Gupta and Dipti Nalin Parikh.
The Offer is being made through the Book Building Process, wherein not more than 50% of the offer shall be available for allocation to Qualified Institutional Buyers, not less than 15% allocation to Non-Institutional Bidders and not less than 35% allocation to Retail Individual Bidders, the official release said. 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, it added.
The proceeds from the fresh issue will be utilised to the tune of Rs 160 crore for repayment or prepayment, in full or part of certain borrowings of the company, Rs 30 cr for capital requirements and for general corporate purposes, the company said. JM Financial Limited and DAM Capital Advisors Limited are the book-running lead managers and Kfin Technologies is the registrar to the offer.
Prasol Chemicals clocked a profit of Rs 50.10 crore in the nine-month period ended December 2021 against Rs 25.08 crore in FY21. Whereas revenue from operations was Rs 626.93 crore for the same period against Rs 595.54 crore in FY21. As on Dec 2021, Export sales contribute 21.24% of its revenues and top 10 clients contribute 17.78%.
Prasol Chemicals has a distribution network spanning 45 countries across Asia, North America and the European Union, the release said, adding that acetone and phosphorus derivatives included in its portfolio are used in pharmaceuticals and synthesis of agrochemical active ingredients. The company has expanded its business and scope of operations.
As of December 31, 2021, Prasol Chemicals had a portfolio of more than 140 products and a pipeline of 32 products under development. In the last three financial years and nine months period, it has launched 38 products. It is planning to expand production capacities, diversify product offerings, increase focus on R&D and also focus on import substitution as well as increasing exports.