Another IPO is imminent: Chemspec Chemicals wants to raise 700 crore by listing on the stock exchange

• Chemspec Chemicals intends to raise 700 crore through a full sale offer from promoters.
• Chemspec Chemicals is one of the world’s leading manufacturers of critical additives for FMCG ingredients used in skin and hair care products, as well as Intermediates for Active Pharmaceutical Ingredients (APIs) used in antihypertensive drugs.
• The company exports products to 42 countries in North America, Europe, Asia-Pacific, the Middle East and Africa.

The year 2021 continues to witness a flood of initial public offerings (IPOs). Here’s another one gearing up to be listed soon. The chemical company submitted a draft of the Red Hering Prospectus (DRHP) on July 14th.

A DRHP is filed when a company plans to raise money and it provides details about its business operations and finances.

The company aims to raise 700 crore through a full sale offer (OFS) from existing promoters Bhaichand Amoluk Consultancy Services (₹ 233 crore), Mitul Vora (₹ 233 crore) and Rushabh Vora (₹ 233 crore). Chemspec Chemicals is one of the world’s leading manufacturers of critical additives for Fast Moving Consumer Goods (FMCG) ingredients used in skin and hair care products and intermediates for active pharmaceutical ingredients (APIs) used in antihypertensive drugs.

As part of its FMCG product portfolio, the company produces active ingredients for sun protection lotions and creams, antibacterial soaps, anti-dandruff shampoos and preservatives.

The company is also the largest manufacturer of “Piroctone Olamine” in India and the largest manufacturer of “Chemilid” (an antibacterial agent) with a market share of approximately 70%.

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Customers include Beiersdorf AG, Unilever Supply Chain Company AG, L’Oreal, DSM Nutritional Products, Godrej Consumers Products, Glenmark Life Sciences, Dr. Reddy’s Laboratories, CTX Lifesciences etc.

Over the years the company has grown from a local supplier to FMCG companies in India to a supplier to multinational FMCG companies in 43 countries on five continents. Income from these companies accounted for 86.67%, 88.88% and 89.76% of total operating income in FY21, FY20 and FY19, respectively.

The company makes these products at the Taloja plant in Maharashtra.

It has exported its products to 43 countries in North America, Europe, the Asia-Pacific region (APAC) including Japan, the Middle East, and Africa

details	FY19	FY20	FY21
revenue	335 crore	607 crore	510 crore
Benefit	5 crore	₹ 60 crore	81 crore

The company’s competitors, including SRF, Vinati Organics, Galaxy Surfactants, etc., have had good double-digit returns over the past six months.

Peer companies	Stock returns in January 2021-June 2021
Galaxy surfactants	50%
Vinati Organics	50%
Aarti Industries	38%
SRF	27%
Fine organic	fifteen%
PI industries	28%
Navin Fluor	42%

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