Fine Organics Ltd will go public next week in an initial public offering (IPO) that will value the speciality chemicals manufacturer at Rs 2,400 crore ($355 million).
The firm has fixed the price band at Rs 780-783 a share for the issue that opens on June 20 and closes three days later.
The public issue, which will seek to raise as much as Rs 600 crore, will entirely be a secondary market sale by the promoters and other selling shareholders of the company. It will consist of 7.66 million shares, representing 25% of the post-issue equity capital.
Fine Organics, which makes ingredients for the petrochemicals and food industry, had filed its IPO proposal on 8 February. It received approval from Securities and Exchange Board of India (SEBI) last month.
The firm is following in the footsteps of about four dozen listed peers, including Blackstone-backed SH Kelkar & Co. Ltd, BASF India and Shree Pushkar Chemicals & Fertilisers.
Earlier this year, specialty chemical maker Galaxy Surfactants Ltd had made a positive stock market debut with an IPO which was subscribed 20 times.
However, the company’s share price has been sliding since it got listed.
Last October, VCCircle was the first to report that Fine Organics was planning to list itself on the stock exchanges. Later, it appointed merchant bankers for the IPO.
JM Financial and Edelweiss Financial Services will manage the IPO for the firm.
Company
The Fine Organics group was established in 1970 by Ramesh Shah and Prakash Kamat. The company was incorporated in 2005 and started operations a year later by setting up a manufacturing facility in Mumbai.
In 2011, its group company Oleofine Organics (India) Pvt. Ltd was merged with Fine Organics. The company’s manufacturing facilities are in Mumbai but it also has joint ventures in Malaysia and Thailand, as per its website.
In December 2016, it launched Fine Zeelandia, a joint venture with the Netherlands-based Zeelandia.
According to its website, the firm has a research and development facility in Mumbai and recently opened an office in Belgium.
Fine Organics is the largest manufacturer of oleochemical-based additives in India and a strong player globally in the industry.
It makes a wide range of speciality plant derived oleochemicals-based additives that are used in industries such as food, plastic, cosmetics, paint, ink, and coatings, besides other specialty applications.
The company sold 387 different types of products as of December last year.
The company reported net profit of Rs 62.58 crore for the nine months ended December 2017 on revenue (from operations) of Rs 585.17 crore for the same period, according to its draft proposal.
Its net profit for the financial year 2016-17 stood at Rs 79.47 crore on revenue of Rs 786.29 crore.
The company’s net profit has risen at a compounded annual growth rate (CAGR) of 30.63% for five years beginning 2012-13. Its revenue from operations has grown at a compounded rate of 9.63%, VCCircle analysis showed.