It has been 108 days since an Indian company made its debut on Dalal Street.
Mumbai-based specialty chemicals maker Rossari Biotech is preparing to debut on the stock exchanges, potentially ending the over 3-month initial public offering (IPO) interruption triggered by the coronavirus lockdown, said people familiar with the matter.
Up to 108 days have passed since an Indian company launched an IPO. Carlyle-backed SBI Cards & Payment Services was the last company to list — on March 16, 2020 — after a Rs 10,000 crore IPO.
A week later, the COVID-19 outbreak forced the Indian government to announce a nationwide lockdown. Since then, no company has dared to flirt with a stock market debut due to sharp volatility and negative sentiment.
"Business has boomed for Rossari Biotech during the COVID-19 phase due to rising demand for disinfectants and sanitisers manufactured by the firm. Post the final approval from Sebi for revised documents with updated financials, the plan is to launch the IPO in a few weeks by mid or end July,” said one of the persons cited above. Investment banks ICICI Securities and Axis Capital are the advisors to the IPO, this person said.
The company filed its DRHP (draft red herring prospectus) with Sebi in December, 2019 and originally intended to launch its IPO on March 18, 2020. It called off the plans due to unfavorable market conditions.
"There has been a significant tilt in the firm’s production to personal care products during COVID -19. Personal care as a segment is more profitable and is the way of life going ahead," said a second person familiar with the listing plans. The proposed IPO launch by Rossario Biotech will be a big boost for the market and will enthuse other IPO aspirants, he said.
A third individual told Moneycontrol told the total size of this IPO is likely to be around Rs 300 crore and it will be a mix of primary and secondary issues of shares. “The proceeds will be used for working capital requirements and to repay loans. In fact, the firm raised around Rs 100 crore in March in a pre-IPO round."
All the three individuals spoke to Moneycontrol on the condition of anonymity.
ICICI Securities & Axis Capital declined to comment in response to an email query from Moneycontrol. Moneycontrol is awaiting a response from Rossari Biotech and will update this article as soon as we hear from them.
According to Prime Database, as of June 26, 2020, 31 companies had valid IPO approvals from markets regulator Sebi. Some of them include Burger King India, SAMHI Hotels Ltd, EasyMyTrip.com, Home First Finance India Ltd, Equitas Small Finance Bank, ESAF Small Finance Bank , NCDEX, UTI Asset Management, Route Mobile Ltd, Montecarlo Ltd and Emami Cement Ltd.
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Rossari Biotech was founded in 2003 as a partnership firm named Rossari Labtech by Edward Walter Menezes and Sunil Srinivasan Chari, two career-technocrats with over 45 years of experience in the specialty chemicals industry. It was renamed as Rossari Biotech Limited and converted into a company in 2009.
The company provides customised solutions to specific industrial and production requirements of customers primarily in the FMCG (home care and personal care), apparel, poultry and animal feed industries. As of September 2019, it supplied home, personal care and performance chemicals to over 284 customers and also manufactured and supplied textile speciality chemical products to 335 customers in over 15 countries. Rossari had a range of 1,960 different products sold across three product categories as of January 2020.Some of its key customers include Hindustan Unilever, RSPL (Ghadi detergent), IFB Industries, Panasonic India, BSH Household Appliances Manufacturing, CICO Technologies, Rentokil Initial Hygiene India and Millennium Papers.