Kronox Lab Sciences refiles IPO papers with only OFS component, drops fresh issue

Kronox Lab Sciences IPO papers refiled with SEBI

Gujarat-based Kronox Lab Sciences has filed draft papers with the capital markets regulator SEBI for fund raising via initial public offering for second time in around two months after the first filing.

As per the latest draft prospectus dated January 25, 2024, the public issue comprises only an offer-for-sale (OFS) of 96 lakh equity shares by promoters.

Promoters Jogindersingh Jaswal, Ketan Ramani, and Pritesh Ramani will be selling 32 lakh shares each in the OFS.

Earlier it had filed the draft red herring prospectus on November 24, 2023. As per the said draft papers, the IPO was a mix of fresh issuance of shares worth Rs 45 crore, and an OFS of 78 lakh equity shares by the above-mentioned three promoters.

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Promoters had planned to sell 26 lakh equity shares each. It was planning to use the fresh issue money mainly for working capital requirements amounting to Rs 30.4 crore, and the remaining for general corporate purposes.

The high purity speciality fine chemicals maker, as per the latest IPO papers filing, will not receive any money from the public issue, and all the money, excluding issue expenses, will go to selling shareholders, i.e. promoters.

Kronox Lab Sciences is 100 percent owned by promoters with Jogindersingh Jaswal and Ketan Ramani holding 34.99 percent shares each, and Pritesh Ramani 30 percent stake in the company, at the time of filing the latest draft papers.

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The high purity speciality fine chemicals are used mainly by companies making pharmaceutical, agrochemical, metal refineries, personal care, and animal health products.

It has more than 185 products including phosphate, sulphate, acetate, chloride, citrate, nitrates, nitrites, carbonate, EDTA derivatives, hydroxide, succinate, and gluconate which are supplied to customers in India and more than 20 countries globally.

Kronox does not have any debt on its books as per the financials reported till December 2023, while the finance cost for the nine months ended in December FY24 (9MFY24) was nil against Rs 0.09 crore in the same period last year.

The firm has recorded a net profit of Rs 15.5 crore for 9MFY24, growing 9.8 percent over the same period last year, but revenue during the same period dropped 8.6 percent year-on-year to Rs 67.7 crore. The profitability was boosted mainly by operating numbers with a fall in input cost, as EBITDA (earnings before interest, tax, depreciation, and amortisation) grew by 14.4 percent on-year to Rs 20.5 crore with margin expansion of 610 basis points at 30.2 percent for 9MFY24.

Further, for the financial year 2022-23, net profit increased by 22 percent to Rs 16.6 crore compared to previous year, and in the same period, revenue from operations rose 16.2 percent to Rs 95.6 crore YoY.

Pantomath Capital Advisors is the sole book-running lead manager to the issue.