Coating emulsions and adhesives maker Jesons Industries plans IPO, files draft papers for Rs 300 crore fresh issue

Jesons Industries IPO

Mumbai-based Jesons Industries is planning to approach capital markets to raise funds for repaying debt, and capital expenditure, as it has filed draft papers with the regulator Securities and Exchange Board of India (SEBI) for an initial public offering.

The proposed IPO comprises of fresh issuance of equity shares worth Rs 300 crore, and an offer-for-sale of 94.6 lakh shares by promoter Dhiresh Shashikant Gosalia.

The Gosalia family-owned company may consider fund raising of Rs 60 crore via pre-IPO round. If it manages to complete pre-IPO placement, the said amount will be reduced from the fresh size.

Jesons Industries is one of the leading manufacturers of coating emulsions for the paint sector and water-based pressure sensitive adhesives in tape and label segments, in terms of sales value, in India. In fact, it has 35 percent market share in India in the water-based pressure sensitive adhesives for tapes and labels.

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The coating materials segment contributed 62 percent to its revenue in the last financial year ended March 2024, while adhesives division accounted for nearly 34 percent to topline.

Jesons Industries competes with listed entities like HP Adhesives, Apcotex Industries, Nikhil Adhesives, and BASF India.

It intends to utilise Rs 165 crore out of the fresh issue proceeds for repaying debt as the consolidated debt as of September 2024 was Rs 168.94 crore. This means there seems to be a significant reduction in its debt, ultimately improving debt to equity ratio.

Further, Rs 77.9 crore funds will be sped for setting up of machine lines for the new adhesives project – solvent based adhesives and flexible packaging adhesives, and the remaining fresh issue money for general corporate purposes.

However, there was inconsistency in the financial performance in the past years with the profit in the fiscal 2024 increasing by 15.4 percent to Rs 56.6 crore compared to previous year, but in FY23, the net was down by 43 percent to Rs 49 crore compared to FY22.

The topline has consistently been declining as revenue for the year ended March 2024 fell by 13.1 percent to Rs 1,496.2 crore compared to previous fiscal, and the same in FY23 was at Rs 1,722 crore, falling 16.6 percent compared to fiscal 2022. Further, profit for the first half of current fiscal 2025 was at Rs 31.6 crore on revenue of Rs 728 crore.

Motilal Oswal Investment Advisors, and IIFL Capital Services are appointed as the merchant bankers for handling the public issue.

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