Aether IPO


Aether IPO Details

Aether Limited IPO
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Why Subscribe to Aether IPO

Aether Industries Limited, speciality chemical manufacturer in India, focused on producing advanced intermediates and speciality chemicals involving complex and differentiated chemistry and technology core competencies. The business was started in 2013 with a vision to create a niche in the global chemical industry with a creative approach towards chemistry, technology and systems that would lead to sustainable growth. In the first phase of the company’s development through Fiscal 2017, it focused on building its team and infrastructure and on its R&D centred around building its core competencies. The company focused on the core competencies model of chemistry and technology.

Objects of the Offer :

The Offer comprises the Offer for Sale and the Fresh Issue. The Fresh Issue aggregates up to ₹7,570 million and the Offer for Sale comprises of up to 2,751,000 Equity Shares. Out of the net proceeds from the fresh issue, ₹1,630 million would be used for Funding capital expenditure requirements for the Proposed Greenfield Project, ₹2,114 million would be used for Prepayment or repayment of all or a portion of certain outstanding borrowings availed by the Company, ₹1,650 million would be used for Funding working capital requirements and the balance would be utilised for general corporate purposes.

Aether IPO Analysis

Consistent track record of financial performance:

The company's revenue from operations has increased at a CAGR of 49.53% from ₹2,011.80 million in Fiscal 2019 to ₹4,498.16 million in Fiscal 2021. The company’s EBITDA increased from ₹496.04 million in Fiscal 2019 to ₹1,161.32 million in Fiscal 2021 at a CAGR of 53%. PAT increased from ₹233.35 million in Fiscal 2019 to ₹711.19 million in Fiscal 2021.

Consolidated Financial Summary Of Aether

(`₹ in Millions) FY19 FY20 FY21
Revenue from Operations 2,011.80 3,018.06 4,498.16
EBITDA 496.04 737.31 1,161.32
EBITDA Margin (%) 24.40% 24.27% 25.59%
PAT 233.35 399.56 711.19
EPS (₹) 2.48 4.24 7.36
ROE 60.54% 51.04% 40.79%

Competitive Strength:

Differentiated portfolio of market-leading products

Aether Industries Limited is focused on producing advanced intermediates and speciality chemicals involving complex and differentiated chemistry and technology core competencies. Its products have applications across a wide spectrum of uses in the pharmaceutical, agrochemicals, material science, coatings, high-performance photography, additives and oil & gas industries. As of September 30, 2021, the company's product portfolio comprising over 22 products that were marketed to over 30 global customers in 17 countries and to over 100 domestic customers. It has achieved these market positions by developing differentiated processes with the use of its core competencies of chemistry and technology, which helped the company to optimize the use of conventional raw materials, improve atom economy, enhance yields, reduce effluent discharge, and increase cost competitiveness.

Focus on R&D to leverage its core competencies of chemistry and technology

According to Frost & Sullivan, Aether Industries Limited’s strategic investments in R&D have been critical to its success and a differentiating factor for the company to attain leading market positions for certain products. (Source: F&S Report, December 2021). Based on the technical expertise the company has developed over the years, it has been able to carry out innovative processes at a global scale, which, according to Frost & Sullivan, is difficult to replicate, and creates significant barriers for new entrants. The company’s chemistry and technology core competencies and all of its products have been developed by its own R&D team, scaled up in its Pilot Plant, and launched into production with in-house design and engineering.

According to Frost & Sullivan, Aether Industries Limited’s in-house development (without the support from any clients for R&D) showcases its innovation and research strength, and its expertise in a large range of chemistries and technologies has allowed the company to support a number of end-use industries. For the competency of tandem Grignard and ethylene oxide chemistry, the company is a pioneer in the Indian speciality chemicals market, and, according to Frost & Sullivan, Aether Industries Limited is also one of the largest manufacturers in India for this extremely versatile chemistry.

Long standing relationships with a diversified customer base

Aether Industries Limited’s customers include over 130 multi-national, global, regional and local companies. As of September 30, 2021, the company’s product portfolio was sold to over 30 global customers in 17 countries and to over 100 domestic customers. The company’s long-term relationships and ongoing active engagements with customers also allow it to plan its capital expenditure and enhance its ability to benefit from increasing economies of scale with stronger purchasing power for raw materials and a lower cost base. These enduring customer relationships also have helped the company expand its product offerings and geographic reach.

Aether Industries Limited’s diversified global customer base assists the company in reducing its geographic dependence, which helps in mitigating the effects of economic and industry-specific cycles. Due to the resources involved in engaging with new suppliers, customers are less inclined to pursue alternate supply sources. This provides the company with an advantage over new entrants that would need to make significant investments and endure a long gestation period with potential customers in order to effectively compete.

Synergistic Business Models focused on Large Scale Manufacturing, CRAMS and Contract Manufacturing

Aether Industries Limited has three business models under which it operates: (i) large scale manufacturing of its own intermediates and speciality chemicals; (ii) CRAMS (contract research and manufacturing services) and (iii) contract / exclusive manufacturing. According to F&S, the company is among the few Indian specialty chemical companies to have successfully launched these three separate business models in just 5 years into commercial manufacturing. (Source: F&S Report, December 2021. These business models benefit from, and have synergies with, each other. For example, its customers to which the company sells its own intermediates and speciality chemicals are also target customers for its CRAMS and contract manufacturing business models. The company’s CRAMS business allows it to work with innovative companies on cutting-edge new products with enhances its own R&D skill sets to develop its own products. Further, increasing the production through its contract manufacturing business allows the company to benefit from larger scale production and negotiating better prices with its suppliers.

Focus on Quality, Environment, Health and Safety (QEHS)

Aether Industries Limited believes that maintaining a high standard of quality for its products is critical to its brand and continued growth. Across its manufacturing facilities, the company has put in place quality systems that cover all areas of its business processes from manufacturing, supply chain to product delivery to ensure consistent quality, efficacy and safety of products. The company’s products adhere to global quality standards. Its products go through various quality checks at various stages including random sampling check and quality check internally. Aether Industries Limited’s manufacturing principles and technologies embody the core tenets of “green” chemistry or sustainable chemistry. Principles of energy saving and conservation, atom economy and the 4R strategy (reduce / recover / recycle / reuse) are fundamental in its manufacturing designs and engineering. In addition, by employing cleaner chemistries, semi-continuous or continuous reaction technologies, and automation in the process. Aether Industries Limited distinguish its processes from conventional processes and optimize use of non-toxic raw materials, resulting in lower effluent generation. Further, as part of environment and sustainability efforts, the company has installed a 100 KLPD in-house zero liquid discharge (ZLD) plant, which includes primary and secondary chemical neutralization, triple stage multiple-effect evaporator (MEE), multiple mechanical vapor recompression (MVR) plants, multiple agitated thin film evaporators, multiple reverse osmosis (RO) plants and a soil biotechnology platform with ozonation.


  • The company is dependent on its R&D activities for its future success.

  • Exchange rate fluctuations may adversely affect its results of operations as its sales from exports and a portion of its expenditures are denominated in foreign currencies.

  • The company requires various licenses and approvals for undertaking its businesses and the failure to obtain or retain such licenses or approvals in a timely manner, or at all, may adversely affect its operations


  • From CY 2020 to CY 2025, the global chemicals market is expected to grow at a CAGR of 6.2% and the India Speciality chemical market at a CAGR of 11.2 %, according to Frost & Sullivan.

  • China’s chemicals market has seen a downturn in recent years due to various factors. While these may not be permanent trends, these will involve significant costs of production for Chinese companies, enabling India to significantly strengthen its position in the global supply chain and position itself as a viable alternative for global players seeking a de-risked supply chain while containing sourcing costs.

  • The GoI is providing support through a production linked incentive (‘PLI’) scheme and other schemes and competitive tax rates. (Source: F&S Report, December 2021).
    Further, the “Make in India” campaign is also expected to add impetus to the emergence of India as a manufacturing hub for the chemicals industry in the medium term.


  • Non-compliance with and changes in, safety, health, environmental and labour laws and other applicable regulations, may adversely affect its business.

  • The company has high exposure to the pharmaceutical industry, which provided 81.33% and 67.62% of the company’s total gross revenue in FY20 and FY21 respectively. Any lower demand from the sector can have a big impact on the company.

  • The company faces competition from both domestic as well as multinational corporations and its inability to compete effectively may have a material adverse impact on its business.

Strategies going forward:

Leverage its strong position in the speciality chemicals industry

Aether Industries Limited market leadership position in a number of speciality chemical product areas is well positioned to capitalize on these market opportunities. According to Frost & Sullivan, the company’s revenue for its key products has grown much faster than the industry highlighting that it is able to take away market share from its competitors, which are mostly in China. (Source: F&S Report, December 2021). The company benefits from the established relationships with multinational, regional and local customers. In particular, the company proposes to introduce new products with varied applications across industries. The company aims to achieve this by leveraging its existing R&D capabilities, as well as by evaluating strategic acquisition opportunities.

Aether Industries Limited also intends to capitalize on the growing demand for its products by expanding its manufacturing capacities and strengthening its sales and distribution network in existing markets and gaining access to newer markets. The company also is looking to connect with existing and potential customers where it can support them with its CRAMS and contract / exclusive business models

Expand its Product Portfolio and diversify into additional business segments

Aether Industries Limited’s plans to continue to expand its product portfolio both in line with its existing new competencies but also by adding new competencies. In the next three years, the company expects to invest approximately ₹125 million towards R&D in the first year with an increasing trend of 30% to 35% in the next two years. The company is also looking to diversify into additional business segments. In addition, it intends to continue to add new core chemistry and technology competencies, which will lead to additional product line developments. Another segment the company is actively considering is the advanced organic silicone products market, which lends itself into high-end high-value applications in material sciences, coatings, advanced electronics and other similar applications.

Expand Manufacturing, R&D and Pilot Plant Capacities

To cater to the growing demand from its existing customers and to meet requirements of new customers, Aether Industries Limited intends to, and are in the process of, expanding its manufacturing capacities for existing products including 4MEP and BFA. The company also intends to add manufacturing capacities for its new product line (discussed above) that it is in the process of developing and commercializing. The company is also in discussions with relevant authorities for acquiring land located in Sachin for a fourth facility, where it intends to manufacture other intermediates for applications in pharmaceuticals, agrochemicals, coatings and oil & gas sectors. In addition, the company looks to build strategic alliances with innovator companies across end-user industries.

Aether Industries Limited is also expanding the capacity of its R&D laboratories by adding an additional 30 fume hoods. In addition, Aether Industries Limited is expanding its Pilot Plant by installing additional trains of pilot scale equipment which will triple its current capacity.

Disclaimer -

The content on this page is made available on the basis of the DRHP (draft red herring prospectus ) filed by Aether Industries Limited. The final content could change based on the Red Herring Prospectus (RHP) filed

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