Archean Chemical Industries Ltd has been granted approval by the Securities Exchange Board of India to raise funds via an initial public offering. The IPO consists of a fresh issue for Rs 1,000 crore and a 19.07 million share offer for existing shareholders and promoters to sell.
Chemikas Speciality LLP would hold up to 5.30 million shares in the OFS, 3.73 million shares in India Resurgence Fund Scheme I, 6.30 million shares in India Resurgence Fund Scheme II, and 3.73 million shares in Piramal Natural Resources Pvt Ltd.
CS LLP has a 41% share in the business. IRF I owns 7.46 percent of the company, IFR II owns 12.19 percent, and PNRPL owns 7.46 percent. The issue’s lead managers are ICICI Securities Ltd, IIFL Securities and JM Financial.
The proceeds from the Rs 800-crore offering would be utilized to completely or partially repay non-convertible debentures. The sum outstanding under the loan arrangements undertaken by the business as of December 2021 was Rs 840 crore, with Rs 116.67 crore in interest accumulated but not payable.
“We believe that redeeming the NCDs would reduce our outstanding debt, cut our debt service obligations, improve our debt-to-equity ratio, and enable us to invest our internal accruals in the growth and expansion of our firm. Furthermore, we believe that our firm’s increased leverage capacity will boost our ability to obtain further funds in the future to support potential business development prospects and ambitions to create and expand our company,”according to the SEBI-filed draft red herring prospectus.
The company is a premier specialist marine chemical producer in India, specializing in the production and export of bromine, industrial salt, and potassium sulfate to clients all over the globe.
At a plant at Hajipir in Gujarat, the company produces goods from brine deposits in the Rann of Kutch, which is located on the state’s beaches. It sold items to 13 worldwide clients in 13 countries and 29 local customers as of September 2021.
The company’s income from operations in FY21 was Rs 740.76 crore, up from Rs 608.17 crore the previous year. The net profit for the period was Rs 66.61 crore, compared to a loss of Rs 36.24 crore the previous year. Revenue from operations was Rs 450.51 crore in September 2021, with a net profit of Rs 58.06 crore. It has a total debt of Rs 984.44 crore.
About the business
Archean Chemical Industries Limited is a private corporation that was founded on July 14, 2009. It is a public limited corporation with headquarters in Chennai, Tamil Nadu. It has a total paid-up capital of Rs 19.27 crore and an authorized share capital of Rs 32.00 crore.
For the fiscal year ending March 31, 2020, Archean Chemical Industries Limited expects operating sales of about Rs 500 crore. Its EBITDA has risen by 118.82 percent in the last year. Its book networth has declined by 82.46 percent in the same period.
There are six directors on the board of directors, as well as two identified senior management people. Subrahmanyam Meenakshisundaram, who was appointed on March 24, 2010, is the board’s longest-serving director. For more than 11 years, Subrahmanyam Meenakshisundaram has served on the board of directors. Ravi Pendurthi, who was appointed on January 29, 2022, is the most recent director.
Subrahmanyam Meenakshisundaram has the most other directorships, with seats in 18 different firms. Through its directors, the corporation is linked to a total of 37 additional businesses.
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