Speciality chemicals maker Rossari Biotech Ltd, India’s largest manufacturer of textile specialty chemicals, has filed a draft prospectus with the Securities and Exchange Board of India (SEBI) for an initial public offering.
The public issue comprises a fresh sale of shares worth Rs 150 crore and a secondary market sale of 10.5 million shares by promoters Edward Menezes and Sunil Chari, according to its draft proposal.
The IPO size is estimated at roughly Rs 700 crore, two people aware of the matter told VCCircle.
A successful IPO will see Mumbai-based Rossari Biotech join listed peers such as Aarti Industries Ltd, Vinati Organics Ltd, Atul Ltd as well as Galaxy Surfactants Ltd and Fine Organics Industries Ltd, both of which went public last year.
Here’s a snapshot of the proposed IPO:
Use of proceeds
The company aims to use Rs 65 crore of the fresh net proceeds to repay debt. It also aims to use Rs 50 crore to fund working capital requirements and an undisclosed amount towards general corporate purposes.
Axis Capital and ICICI Securities are merchant bankers arranging and managing the share sale. Axcelus Finserv Pvt. Ltd is the adviser to the overall offer.
Shardul Amarchand Mangaldas & Co is the legal counsel to the company. J. Sagar Associates and Squire Patton Boggs Singapore LLP are India and international legal counsel to the merchant bankers.
The company 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.
Its 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% of its overall revenue for the six months ended September 2019 while textile speciality chemicals made up for about 45%.
The company’s Silvassa facility has an installed capacity of 100,000 tonnes a year. It is adding another 20,000 tonnes capacity by March 2021. Besides, Rossari aims to commission a factory at Dahej with a proposed annual installed capacity of 132,500 tonnes in 2020-21. It also has two research and development facilities in Silvassa and Mumbai.
The company had a network of 194 distributors in India and 27 distributors in 17 foreign countries as on September 2019. Rossari’s customers include companies such as IFB Industries Ltd, Hindustan Unilever Ltd and Arvind Ltd.
The company reported consolidated net profit of Rs 31.9 crore for the six months ended September 2019 on operating revenue of Rs 278.14 crore. Its full fiscal year 2018-19 consolidated net profit was Rs 45.68 crore on revenue of Rs 516.21 crore.