Specialty chemical maker Galaxy Surfactants Ltd has received the Securities and Exchange Board of India’s approval to float an initial public offering.
The company received SEBI’s final observations on 12 January. It becomes the second firm to receive regulatory clearance for an IPO in 2018. As many as 46 firms had received clearance for IPOs in 2017, according to SEBI’s website.
Galaxy had refiled its draft red herring prospectus (DRHP) in November last year after it failed in its earlier attempt to go public in May 2011.
In its earlier version, Galaxy was looking to raise up to Rs 201 crore in May 2011 by selling 25% of the company’s shares. However, the issue was subscribed just 30% bids for its shares and it was forced to withdraw its IPO one day ahead of the closure of the issue. At that time, the firm was looking to raise funds for expansion of its facilities in Gujarat and Egypt.
Now, Galaxy’s renewed public offer comprises entirely a secondary market sale of 6.33 million shares by promoters and individuals. In all, 307 individuals have proposed to sell their shares through the IPO.
Navi Mumbai-based Galaxy will join peer Fine Organic Industries Pvt. Ltd which is also preparing for an IPO and is expected to file its draft red herring prospectus with SEBI.
VCCircle was first to report on the company’s plan to go for an IPO after its strategic talks with international suitors failed in early 2017.
VCCircle had also reported about the appointment of the merchant banker to arrange the IPO.
The issue size is pegged at roughly Rs 900-1,000 crore ($140-150 million), two persons familiar with the development had informed VCCircle. The IPO will result in a 17.85% stake sale to public investors.
The company will not receive any proceeds from the IPO. The money will go to existing shareholders, including promoter individuals, as per the draft document.
ICICI Securities, Edelweiss Financial Services and JM Financial Institutional Securities are merchant bankers managing the IPO.
Galaxy, which was incorporated in May 1986, makes surfactants and other specialty ingredients for the personal care and home care industries. Its products are used in consumer-centric personal care and home care products, including, skin care, oral care, hair care, cosmetics, toiletries and detergent products.
The company claims to have significantly expanded and diversified its product profile since its inception 31 years ago.
The firm caters to multinational, regional and local players operating in the home and personal care industries.
Its product portfolio, divided into performance surfactants and specialty care products, comprises over 200 product grades marketed to more than 1,700 customers in over 70 countries.
Galaxy counts Cavinkare Pvt Ltd, Colgate-Palmolive (India) Ltd, Dabur India Ltd, Henkel, Himalaya, L’ORÉAL, Procter & Gamble Home Products Pvt Ltd, Reckitt Benckiser and Unilever, among others as its key clients.
Since 2002, the company has received 47 patents with 10 obtained in the US and two each in China, European Union, Japan, Russia and India.
The firm currently owns and operates seven manufacturing facilities of which two are located outside India. In addition, it recently set up a pilot plant at Tarapur, Maharashtra, to scale up products.
Galaxy counts Unnathan Shekhar, Gopalkrishnan Ramakrishnan, Shashikant Shanbhag and Sudhir Dattaram Patil as promoters who have been with the company since its inception.
For additional information on Galaxy’s proposed IPO, click here