Mumbai-based speciality chemicals firm Rossari Biotech will kickstart its initial public offer next week, on July 13, and end nearly four months of COVID-19-induced inactivity for IPOs in the domestic markets.
On July 3, 2020, Moneycontrol had reported that the Mumbai-based company was all set to be the first listed company in the lockdown phase.
Carlyle-backed SBI Cards & Payment Services was the last company to list — on March 16, 2020 — after a Rs 10,000 crore IPO.
The issue will open on July 13 and close on July 15. The price band is between Rs 423-Rs 425/share according to an IPO note by one of the book running lead managers, Axis Capital.
ICICI Securities is the other advisor on the issue. Each share will have a face value of Rs 2 with bid lots available in 35 shares and in multiples thereof.
The IPO will consist of a fresh issue of equity shares aggregating up to Rs 50 crore and an offer for sale component of up to 10,500,000 equity shares. The issue size is pegged around Rs 494-Rs 496 crore.
Based on the indicative timeline, trading is likely to commence on July 23. The proceeds from the IPO will be used to primarily repay debt and fund working capital requirements, along with general corporate purposes.
Rossari Biotech’s business is organised in three main product categories –
(i) home, personal care and performance chemicals (HPPC);
(ii) textile specialty chemicals; and
(iii) animal health and nutrition products (AHNP).
As on May 31, 2020, it had a range of 2,030 different products sold across these categories. The products are used in the manufacture of soaps and detergents, paints, inks, tiles, papers, natural and man-made textiles.
HUL, IFB Industries & Arvind Ltd are some of its key customers and the firm counts Aarti Industries, Galaxy Surfactants , Atul Ltd , Vinati Organics & Fine Organics Industries as some of its listed peers.
The revenue from sale of HPPC constituted 46.81 percent of the total revenue in fiscal 2020, textile specialty chemicals constituted 43.71 percent and the rest came from the animal health and nutrition products category.
According to an IPO note from Axis Capital, “Manufacturing of disinfectants & sanitisers as part of the home, personal care & performance chemicals led the company’s products to get categorised under essential goods, therefore, manufacturing facility at Silvassa was not shut down during the COVID-19 lockdown.
"The HPPC segment has been positively impacted with higher demand for disinfectants & sanitisers however the textile specialty chemicals segments witnessed a temporary reduction in demand.”
In fiscal 2020, Rossari Biotech registered a total revenue of Rs 603.82 crore, EBITDA of Rs 104.53 crore and net profit after tax of Rs 65.25 crore. The firm has been able to increase the total revenue from fiscal 2018 to fiscal 2020 at a CAGR of 41.65 percent, EBITDA at a CAGR rate of 56.58 percent and the profit after tax has increased at a CAGR of 60.27 percent over the same period.