Chemplast Sanmar, which was delisted practically a decade ago, filed a Draft Red Herring Prospectus (DRHP) with the capital markets regulator SEBI to raise Rs 3,500 crore through IPO. The public challenge will comprise a fresh challenge of Rs 1,500 crore and an present-for-sale (OFS) of Rs 2,000 crore by the current promoters and shareholders. Chemplast Sanmar is a element of Chennai-based industrial conglomerate Sanmar Group, and is backed by Canadian billionaire Prem Watsa. The OFS comprises the sale of Rs 1,850 crore by Sanmar Holdings Ltd and Rs 150 crore by Sanmar Engineering Services Ltd. According to DRHP, Chemplast Sanmar was delisted from BSE, NSE and MSE with impact from June 25, 2012, June 18, 2012 and June 25, 2012, respectively.
Chemplast Sanmar listed sector peers
Upon effective listing, Chemplast Sanmar will join the likes of PI Industries, SRF Ltd, Finolex Industries and Navin Fluorine International Ltd. The typical sector P/E ratio is 45.27x. The corporation has planned to utilise the net proceeds towards funding the early redemption of NCDs issued by the corporation, in complete worth Rs 1,238 crore and for basic corporate purposes. Global coordinators and book operating lead managers consist of ICICI Securities, Axis Capital, Credit Suisse Securities Pvt Ltd, IIFL Securities, Ambit Pvt Ltd, BOB Capital Markets Ltd, HDFC Bank, IndusInd Bank, and YES Securities. The registrar to the challenge is KFin Technologies Pvt Ltd. “In addition, we believe that our improved leverage ratio, consequent to such redemption of NCDs, will improve our ability to raise debt in the future to fund potential business development opportunities and plans,” the corporation mentioned.
Chemplast Sanmar financials
For fiscal 2020, Chemplast Sanmar recorded a total earnings of Rs 1,265.51 crore against Rs 1,266.77 crore in the earlier year. While for the nine months ended December 31, 2020, it posted a total earnings of Rs 877.5 crore. The corporation clocked a net profit Rs 46.13 crore in fiscal 2020 as compared to Rs 118.46 crore a year ago. As of December 2020, its net debt stood at Rs 1,187.58 crore. Chemplast Sanmar is specialty chemical compounds manufacturer in India with concentrate on specialty paste PVC resin and custom manufacturing of beginning components and intermediates for pharmaceutical, agro-chemical and fine chemical compounds sectors. The total production of specialty paste PVC resin in India in monetary year 2020 stood at 78 KTPA against a demand of 143 KTPA.
In India, Grasim Industries Ltd. (which includes Aditya Birla Chemicals), DCM Shriram Limited (DCM Shriram), Gujarat Alkalies and Chemicals Ltd.(GACL), and Reliance Industries Limited (RIL) have a combined capacity of more than 2800 KTPA. Grasim Industries Ltd. has chlor-alkali facilities at seven areas, DCM Shriram, Chemplast Sanmar and GACL at two areas every single, and Reliance Industries at one place. Most of these facilities are situated in the western element of the nation. Capacity utilisation of Indian players declined in monetary year 2020 owing to a rise in imports and weak demand. In the lengthy run, India is anticipated to turn net exporter of caustic soda as capacity additions outpace incremental demand with the anticipated capacity additions in chlorine downstream supporting the sector.