Shiva Pharmachem Ltd, a notable manufacturer of acid and alkyl chlorides, has taken a significant step towards financial expansion by filing draft papers with the Securities and Exchange Board of India (SEBI) to launch an initial public offering (IPO) with the aim of raising Rs 900 crore.
Latest IPO News: Key Highlights
- Shiva Pharmachem Ltd files draft papers for Rs 900 crore IPO via an offer for sale by promoters.
- Promoters to sell shares worth Rs 383 crore, Geetganga Investment to sell Rs 134 crore worth of stocks.
- Gujarat-based specialty chemicals company, largest acid and alkyl chlorides manufacturer in India.
- Exports constituted over 80% of FY23 business, serving 181 multinational and domestic companies.
- Diverse product portfolio used in agrochemicals, pharmaceuticals, polymers, cosmetics, and more.
- FY23 revenue at Rs 1,079.5 crore, net profit increased by 40% to Rs 116.65 crore.
Shiva Pharmachem LTD IPO Approach
In accordance with the submitted draft documents, the company intends to raise the capital through a public issue that exclusively consists of an offer for sale (OFS) orchestrated by its promoters. This move entails the sale of shares by prominent stakeholders, namely Vishal Rakesh Agrawal and Rahul Rakesh Agrawal, accounting for shares worth Rs 383 crore. Additionally, Geetganga Investment plans to sell stocks valued at Rs 134 crore through the OFS mechanism.
The Objective of the Shiva Pharmachem LTD IPO
It is noteworthy that Shiva Pharmachem Ltd, headquartered in Gujarat and specializing in the production of acid and alkyl chlorides, will not directly benefit from the IPO proceeds. The entire generated capital, excluding the expenses associated with the issue, will be allocated to the selling shareholders.
- Fund Capital Expansion: Shiva Pharmachem aims to raise Rs 900 crore via IPO to support its growth initiatives.
- Promoter Stake Dilution: The IPO involves an offer for sale (OFS) by promoters to reduce their shareholding.
- Increase Shareholder Liquidity: The IPO seeks to enhance stock liquidity and attract a wider range of investors.
- Build Brand Visibility: Shiva Pharmachem intends to leverage the IPO process to enhance its market reputation and visibility.
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About the Company- Shiva Pharmachem Ltd
Being a company wholly owned by its promoters, Shiva Pharmachem Ltd boasts three manufacturing facilities located in Luna and Dahej SEZ in Gujarat, as well as Sajóbábony in Hungary. In the year 2022, the company proudly secured the title of the largest acid and alkyl chlorides manufacturer in India based on volume.
The enterprise has established itself as a significant player in the domain, with more than 80% of its business attributed to exports during the fiscal year 2023. The company served a diverse clientele, consisting of 181 multinational and domestic companies, by providing a range of over 100 specialized products. These offerings encompass various categories, including aliphatic and aromatic chlorides, nitriles, alkoxy ketones, herbicide safeners, thiocarbamates, chloroformates, and isocyanates.
The applications of these products span across sectors such as agrochemicals, performance materials, disinfectants, pharmaceuticals, polymers, and cosmetics. Notable clients of Shiva Pharmachem Ltd include DuPont Specialty Products USA LLC, Godrej Agrovet, Nouryon Functional Chemicals BV, Reckitt Benckiser (India), SRF, and Syngenta Crop Protection AG.
Financial Performance of Shiva Pharmachem Ltd
In terms of financial performance, Shiva Pharmachem Ltd demonstrated a commendable 6.2% year-on-year growth in revenue from operations, reaching Rs 1,079.5 crore for the fiscal year ending March FY23. The net profit experienced a substantial surge of 40%, amounting to Rs 116.65 crore during the same period. This impressive growth was accompanied by a noteworthy expansion in margins, reaching 10.66%. Despite this, the company recorded a single-digit growth in its topline figures.
In the fiscal year 2023, the company showcased a strong operational performance. Evidently, there was a notable increase of 27.8% in EBITDA (earnings before interest, tax, depreciation, and amortization), reaching an impressive sum of Rs 204.2 crore. This growth was seamlessly matched with a margin expansion of 320 basis points, culminating in a margin of 18.92% compared to the preceding year. By the end of FY23, the company’s borrowings stood at Rs 347.1 crore, indicating an 8.3% rise from the previous year.
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