Blackstone-backed SH Kelkar makes strong stock market debut

SH Kelkar & Co. Pvt Ltd, a Mumbai-based maker of fragrances and flavours, listed on the bourses with smart gains after its initial public offer (IPO) saw strong investor interest.

The scrip listed at a premium of 23.3 per cent to its issue price of Rs 180 and ended the first day at Rs 209.85 a share on BSE, or 15.2 per cent over the IPO price, in a strong Mumbai market on Monday.

It touched an intra-day high of Rs 225.7 and low of Rs 199.6 a share on BSE.

The IPO that was  oversubscribed 28 times allowed the firm to raise Rs 210 crore through the issue of fresh shares. Blackstone, which invested in the company in 2012 and held a 33.28 per cent equity stake in the firm, sold just under one-third of its stake through the IPO for about Rs 238 crore.

For Blackstone, the world's-largest alternative assets manager, this was the first liquidity event in India through an IPO. Two years ago, it had explored a similar part-exit through a proposed public issue of Emcure Pharmaceuticals Ltd but later opted for a secondary deal where Bain Capital bought it out.

SH Kelkar intends to use issue proceeds for repayment of loans and investment in subsidiary KV Arochem.

Incorporated in 1955, the firm is a manufacturer of fragrances and flavours finding applications in varied sectors such as fast-moving consumer goods (FMCG), pharmaceuticals and dairy products.

It is promoted by Vaze family with Ramesh Vaze as chairman, B Ramkrishnan (chief executive officer) and Kedar Vaze (director and chief operating officer).

It has three manufacturing units in India (two fragrance units in Maharashtra and one bulk aroma chemicals unit in Vapi, Gujarat), and one in the Netherlands, with a total installed manufacturing capacity of over 19,819 tonnes annually.

The company exports fragrances to 52 countries and flavours to almost 15 countries.

JM Financial and Kotak Mahindra Capital were the bankers to the issue.

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