Shiva Pharmachem files draft papers to raise Rs 900 crore via IPO

Shiva Pharmachem files draft papers to raise Rs 900 crore via IPO

Acid and alkyl chlorides manufacturer Shiva Pharmachem has filed the draft red herring prospectus with the Securities and Exchange Board of India (SEBI) for fundraising via an initial public offering on August 21.

As per the draft papers filed with the market regulator, the company is planning to mop up Rs 900 crore via public issue which comprises only an offer for sale (OFS) by its promoters.

Promoters Vishal Rakesh Agrawal, and Rahul Rakesh Agrawal will be selling shares worth Rs 383 crore, while Geetganga Investment will sell Rs 134 crore worth of stocks via OFS.

Hence, the Gujarat-based speciality chemicals company will not receive any money from the public issue. All the money, excluding issue expenses, will go to selling shareholders.

The 100 percent promoter-owned company with three facilities at Luna and Dahej SEZ in Gujarat, and Sajóbábony in Hungary claimed to be the largest manufacturer of acid and alkyl chlorides, by volume, in 2022 in India.

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The company, which received over 80 percent of business via exports in FY23, served 181 multinational and domestic companies during the financial year. It offered over 100 specialised products including aliphatic and aromatic chlorides, aliphatic and aromatic nitriles, alkoxy ketones, herbicide safeners, thiocarbamates, chloroformates and isocyanates.

These products are mainly used in sectors like agrochemicals, performance materials, disinfectants, pharmaceuticals, polymers, and cosmetics. DuPont Specialty Products USA LLC, Godrej Agrovet, Nouryon Functional Chemicals BV, Reckitt Benckiser (India), SRF and Syngenta Crop Protection AG are some of its customers.

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Shiva Pharmachem has recorded 6.2 percent on-year growth in revenue from operations at Rs 1,079.5 crore for the year ended March FY23. Net profit during the same period increased sharply by 40 percent to Rs 116.65 crore with a 259 bps expansion in margins at 10.66 percent for the year, though there is a single-digit growth in topline.

The operating performance, too, was strong with EBITDA (earnings before interest, tax, depreciation and amortisation) in FY23 increased by 27.8 percent to Rs 204.2 crore with margin expanding by 320 bps to 18.92 percent compared to the previous year, whereas the borrowings at the end of FY23 stood at Rs 347.1 crore, increasing by 8.3 percent over the previous year.

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JM Financial and Kotak Mahindra Capital Company are appointed as merchant bankers to the issue, while Link Intime India is the registrar to the offer.