Another specialty chemicals company, Chemplast Sanmar is hitting the street with its Rs 3,850 crore IPO (initial public offer) on August 10. Here are nine details about the offer that you should know.
Open and close date: The offer will open for subscription on August 10 and the bidding will close on August 12. The anchor book, if any, will open for a day before the issue opening, i.e. August 9.
Price band: The price band for the specialty chemical maker has been fixed at Rs 530-541 per share having a face value of Rs 5 per share.
Lot size: Investors can bid for a minimum of 27 equity shares and in multiples thereafter, translating to a minimum bidding amount of Rs 14,607 at the higher end of the price band. A retail investor can at max apply for 13 lots or 351 shares for Rs 1,89,891.
Issue size: The Rs 3,850-crore public offer comprises fresh issuance of equity shares of Rs 1,300 crore, and an OFS (offer for sale) of Rs 2,550 crore by its promoter entity Sanmar Holdings and Sanmar Engineering Services that will offload Rs 2,463.44 crore and Rs 86.56 crore worth of shares respectively.
Objective of issue: The Chennai-based company will utilise the net proceeds from fresh issue towards early redemption of the non-convertible debentures (NCDs) and for general corporate purposes.
“Early redemption of the NCDs in full will help reduce our outstanding indebtedness and debt servicing costs, assist us in maintaining a favourable debt to equity ratio, and enable utilisation of our internal accruals for further investment in business growth and expansion,” stated Chemplast Sanmar in the prospectus.
What’s in it for retail investors: Not more than 75% of the total offer has been reserved for qualified institutional buyers, up to 10% for retail investors, and the rest 15% for non-institutional buyers.
About the company: Chemplast Sanmar is a leading specialty chemical manufacturer in India. The company is engaged in the manufacturing of specialty paste PVC resin, starting materials, and intermediates for agro-chemical, pharmaceuticals, agro-chemical, and fine chemical sectors. It also produces other types of chemicals such as Caustic Soda, Chlorochemicals, Hydrogen Peroxide, Refrigerant gas, and Industrial Salt.
The company has four manufacturing facilities, among which, 3 are situated at Mettur, Berigai, and Cuddalore in Tamil Nadu, and one is located in Puducherry at Karaikal.
On the financial front, the company reported total revenue of Rs 3,815.11 crore compared to Rs 1,266.77 crore in FY19. Company’s bottom line almost quadrupled during the same period from Rs 118.46 in FY19 to Rs 410.24 crore in FY21.
Book running lead managers and registrar to the IPO: The book running lead managers to the issue are ICICI Securities, Axis Capital, Credit Suisse Securities (India) Private Ltd, IIFL Securities, Ambit, BOB Capital Markets, HDFC Bank, IndusInd Bank and Yes Securities. The registrar to the issue is KFintech.
Issue timeline: The issue is likely to finalize the basis of allotment by August 18, and the initialization of refunds will take place by August 20. While the credit of equity shares to depository accounts of the allottee will be done on August 23. The company is expected to make its stock market debut on August 24, 2021.
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