Prasol Chemicals gets SEBI go ahead for IPO

30 Aug 2022 , 12:07 PM

The SEBI has approved Mumbai-based Prasol Chemicals Limited's Initial Public Offering (IPO). Prasol Chemicals Limited is one of India's top forward-integrated producers of acetone derivatives and phosphorous derivatives.

A fresh issue of equity shares with a face value of up to Rs250 crore and an offer-for-sale (OFS) of up to 9,000,000 equity shares by existing shareholders make up the initial share sale, which has a face value of Rs2 per equity share. The offer is being made through the book building process, in which not less than 15% of the offer must be made available to non-institutional bidders, not less than 35% of the offer must be made available to retail individual bidders, and not more than 50% of the offer must be allocated to qualified institutional buyers.

The company may think about issuing additional equity shares for up to Rs50 crore after consulting with the issue's lead bankers. If such a placement is successful, the size of the new issue will be decreased.

Approximately Rs160 crore of the proceeds from the new issue would be used for repayment or prepayment, in full or in part, of certain company borrowings. Additionally, Rs30 crore will be used to meet working capital needs and for other corporate purposes.

Prasol Chemicals has grown since it was founded, going from a modest manufacturer to a sizable, diversified specialty chemical firm with a presence all over the world. The Two Star Export House Company, recognized by the Government of India, derives all of its income from exports and has a global distribution network encompassing 45 nations in Asia, North America, and the European Union.

To create new products from waste streams, it recently partnered with Technolab and IIT Chemical Engineering.

Its portfolio contains a number of acetones and phosphorus derivatives that are employed in the production of agrochemical active ingredients (technicals) and formulations, in addition to serving as a vital raw material in the production of sunscreens, shampoos, flavors, and disinfectants. Due to the scarcity of acetone derivative producers locally, it has little competition from SI Group, Solvay, Evonik, Arkema, and ALTIVIA.

The company had over 140 goods in its portfolio as of December 31, 2021, and 32 more were in the pipeline for development. In the recent three fiscals and nine months period, it has launched 38 goods.

PI Industries Limited, Bayer CropScience Limited, Solvay Specialities India Private Limited, Proctor & Gamble, Dr. Reddy's Laboratories Limited, Alembic Pharmaceuticals Limited, Coromandel International Limited, Arkema, Lubrizol India Private Limited, UPL Limited, Olon Active Pharmaceutical Ingredients India Private Limited, MSN Laboratories Private Limited, Oriental Aromatics Limited, Asian Paints Limited, Indoco, and others are among the clients that Prasol has built relationships

The impact of COVID-19 reduced the company's profit to Rs25.08 crore in the financial year FY21 from Rs37.77 crore, while operating revenue increased 12.10% to Rs595.54 crore in fiscal 2021 from Rs531.24 crore in fiscal 2020, primarily as a result of an increase in the selling price of the manufactured specialty products. With revenue of Rs626.93 crore, profit for the nine-month period ending in December 2021 was Rs50.10 crore. As of December 2021, less than 25% of its revenues come from the top 10 goods, and less than 15% from the top 5.

The book-running lead managers of the offer are JM Financial Limited and DAM Capital Advisors Limited, while Kfin Technologies is the registrar.