Specialty chemicals company Laxmi Organics files DRHP for Rs 800-crore IPO

In the season of IPOs, Laxmi Organics, a leading manufacturer of acetyl intermediates and specialty intermediates, could be the newest entrant. The company has filed the draft red herring prospectus (DRHP) with the capital market regulator Sebi for its maiden public issue.

The initial public offering consists of a fresh issue of Rs 500 crore and an offer for sale of Rs 300 crore by promoter Yellow Stone Trust.

The Mumbai-based speciality chemicals manufacturer, which started as a manufacturer of acetaldehyde and acetic acid in 1992, has transformed into the largest manufacturer of ethyl acetate in India.

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Laxmi Organics has a diverse product portfolio into varied chemistries in specialty intermediates and has an encapsulated market share of approximately 30 percent of the Indian ethyl acetate market and approximately 55 percent of the diktene derivatives market.

The company has expanded its scale of operations and has a global presence with customers in more than 30 countries including China, Netherlands, Russia, Singapore, United Arab Emirates, United Kingdom and United States of America.

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Laxmi Organics will utilise fresh issue proceeds for setting up a manufacturing facility for fluorospecialty chemicals, working capital requirements, purchase of plant and machinery, repayment of certain outstanding, upgrading existing units, and general corporate purposes, it said.

The company has been catering to marquee names like Alembic Pharmaceuticals, Dr Reddy's Laboratories, Hetero Labs, Laurus Labs, Macleods Pharmaceuticals, Mylan Laboratories, Neuland Laboratories, Suven Pharmaceuticals, Granules India, United Phosphorous, Syngenta Asia Pacific and Sudarshan Chemicals.

In 2012, International Finance Corporation acquired a 10.05 percent equity stake, which the company bought back in January 2020 for Rs 82.01 crore.

The company has appointed Axis Capital and DAM Capital Advisors as the managers to the issue.