Rossari Biotech IPO to open on Monday; price band fixed at Rs 423-425 per share

NEW DELHI: The price band for the upcoming Rs 500 crore IPO by specialty chemicals manufacturer Rossari Biotech has been set at Rs 423-425 a piece. The issue will open on July 13, Monday.

The IPO would be a mix of fresh issue and offer for sale (OFS). The promoters would sell up to 10,500,000 equity shares, comprising an OFS of up to 5,250,000 shares by Edward Menezes and up to 5,250,000 shares by Sunil Chari. The company would also raise Rs 50 crore in fresh capital. This is against the earlier intended size of Rs 150 crore.

In a pre-IPO placement, the company had raised Rs 99.99 crore in a private placement of 2,352,920 shares to various investors including Malabar India Fund, Axis New Opportunities AIF-I , Mirae Asset Mid Cap Fund, Sundaram Mutual Fund A/C Sundaram Select Micro Cap Series - XIV, IIFL Special Opportunities Fund – Series 4 and ICICI Lombard General Insurance Company.

Rossari Biotech focuses on home, personal care and performance chemicals. The company is among the largest manufacturers of textile specialty chemicals in India. It also manufactures acrylic polymers.

The company, which plans to venture into the construction chemicals market and water treatment formulations, will allot shares to anchor investors on July 10. The IPO will close on July 15.

Rossari intends to use the proceeds of the fresh issue and the proceeds from the pre-IPO placement to repay or prepay borrowings availed by the company of Rs 65 crore, to fund its working capital requirements of Rs 50 crore and towards general corporate purposes.

The company generated total revenues of Rs 603.80 crore and a net profit after tax of Rs 65.25 crore.
Over the last 3 years, it has managed to clock a compounded annual growth rate of 41.65 per cent for its revenues and a compounded annual growth rate of 60.27 per cent for its profit after tax.

The debt-equity ratio of the company stood steady at 0.23 across FY2018-2020, the company said.

The global specialty chemicals market cumulatively constitutes a global market of approximately $237 billion in 2018 and is expected to grow at 5.4 per cent per annum to reach approximately $308 billion by 2023.

Axis Capital and ICICI Securities are the book running lead managers to the offer and Axcelus Finserv Private is the advisor to the offer. Link Intime India Private Limited is the registrar to the Offer.