Rossari to raise capital from Sumeet Nagar’s hedge fund, others

By Joseph Rai

  • 24 Mar 2021

Speciality chemicals maker Rossari Biotech Ltd, which went public in the thick of the Coronavirus pandemic last year, plans to raise Rs 300 crore ($41 million) from a bunch of investors including funds that had chipped in during its pre-IPO fundraising exercise. 

As part of the transaction, Rossari said in a stock market disclosure, that it would issue 3 million shares on a preferential basis at a price of Rs 996 per equity share. 

The shares will be issued to Malabar India Fund, a hedge fund run by New York-based Sumeet Nagar; and India Acorn Fund, which was floated by former Goldman Sachs emerging market fund manager Prashant Khemka, among others.   

Post the preferential issue of shares, Malabar's stake will increase from 1.33% to 2.63% and India Acorn Fund's stake will rise from 0.68% to 1.28%. 

These funds were among investors at Rossari's pre-IPO stage last year.

Part of the equity shares will also be issued to SBI Mutual Fund which already owned 5.51% in Rossari. Its stake via various schemes in the company will jump to 7.04%. A portion of the equity shares will also be allotted to two Indviduals Ramesh Siyani and Arpit Khandelwal who will both own 0.82% each post the transaction. 

Rossari was originally incorporated as a partnership firm, Rossari Labtech, in March 2003. It makes specialty chemicals used as raw material in the FMCG, apparel, poultry and animal feed industries.  

Last year in July, the company made a stellar debut on the stock exchanges. The debut followed an IPO that was covered nearly 80 times with heavy demand from all categories of investors. This was the first IPO since India went into a lockdown in late March to control the Covid-19 pandemic. 

Rossari's product portfolio comprises home, personal care and performance chemicals; textile specialty chemicals; and animal health and nutrition products. The home and personal care segment accounted for 46.81% of its overall revenue for the year ended March 2020, while textile speciality chemicals made up for 43.71%.  

The company had a network of 204 distributors in India and 29 distributors in 17 foreign countries as of March 2020. Rossari’s customers include companies such as IFB Industries Ltd, Hindustan Unilever Ltd and Arvind Ltd. 

The company reported consolidated net profit of Rs 65.25 crore for the year ended March 2020 on operating revenue of Rs 603.81 crore. Its 2018-19 consolidated net profit was Rs 45.68 crore on revenue of Rs 517.12 crore. 

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