Maize-based speciality products maker Paramesu Biotech has filed preliminary papers with the capital markets regulator SEBI to raise Rs 600 crore via an initial public offering. The IPO is a combination of fresh issuance of equity shares worth Rs 520 crore, and an offer-for-sale of Rs 80 crore by promoter Unimark Business Solutions.
The promoter holds 92.19 percent shareholding in the company, and the remaining 7.81 percent are owned by the public shareholders.
The Andhra Pradesh-based company may also consider fund-raising of Rs 90 crore in the pre-IPO round. If it completes the pre-IPO placement before the filing of red herring prospectus with the Registrar of Companies (RoC), the said amount will be reduced from the fresh issue component.
With production unit in Devarapalli, Andhra Pradesh, Paramesu is one of the largest manufacturers of maize-based speciality products in India with an installed capacity of 800 TPD (tonnes per day). It specialises in different kinds of modified starches including dextrin, pre-gelatinized starch, thin boiled starch, cationic starch, oxidized starch, and spray starch.
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Its major customers include Emami Paper Mills, Tunav Food Products, Singhania Foods International, Prayagh Consumer Care, SA Pharmachem, ALMS Food, Shree Vijay Oils, Shri Guru Oil Industries, Vikas Cattlefeed, PT Torabika Eka Semesta, and Lotus Essential SDN BHD.
Paramesu Biotech, which competes with listed entities like Sanstar, Gujarat Ambuja Exports, Gulshan Polyols, and Sukhjit Starch and Chemicals, will spend Rs 330 crore out of the net fresh issue proceeds for setting up of new plant with capacity of 1,200 TPD at proposed facility in Narmadapuram, Madhya Pradesh. Furthermore, it will utilise Rs 85 crore for repaying debt, and the remainder for general corporate purposes.
Its total debt as of September 2024 amounted to Rs 216.2 crore
The company has recorded a 24 percent on-year growth in net profit at Rs 40.3 crore for the year ended March 2024, up from Rs 32.5 crore despite muted topline growth and higher finance cost, aided by strong operating numbers. Revenue during the fiscal 2024 grew by 0.6 percent to Rs 627.8 crore compared to previous year. EBITDA in FY24 surged 35 percent to Rs 76.5 crore with margin expansion of 310 bps to 12.2 percent compared to FY23.
Profit for the six-month period ended September 2024 stood at Rs 26.85 crore on revenue of Rs 407.6 crore.
Pantomath Capital Advisors has been appointed as the merchant banker to the issue, while Bigshare Services is the registrar to the offer.
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