Pre-IPO placement earns Rs 130 crore for Aether Industries

1 March 2023
3 mins read
Pre-IPO placement earns Rs 130 crore for Aether Industries

Aether Industries Limited, a specialty chemicals firm, has raised an additional Rs 130 crore in pre-IPO capital from White Oak Capital, SBI Mutual Funds, IIFL, and Public Sector Pension Investments. The Surat-based firm earlier secured Rs 100 crore in a pre-IPO placement from IIFL Group and White Oak Capital in November 2021.

On December 28, last year, the business filed a draft red herring prospectus with market regulator SEBI to raise Rs 757 crore via primary issue of shares and an offer-for-sale of 27,51,000 equity shares. The IPO is likely to raise close to Rs 1,000 crore, according to media estimates. The new issue funding has been decreased to Rs 627 crore after the pre-IPO round.

Aether Industries is an Indian specialty chemicals company that specializes in advanced intermediates and specialty chemicals that need complicated and distinct chemistry and technology.

Ashwin Jayanthilal Desai (co-founder of Anupam Rasayan), his wife Purnima Ashwin Desai, and their sons Rohan Ashwin Desai and Dr. Aman Ashwinbhai Desai co-founded the firm in 2013. It has an installed capacity of 6096 mt per year and serves the pharmaceutical, agrochemical, material science, electronic chemical, high-performance photography, and oil and gas industries.

The operational income of Aether Industries increased by 50% from Rs 301.87 crore in FY20 to Rs 450.23 crore in FY21. In addition, the company’s net earnings increased by more than 75% from Rs 39.6 crore in FY20 to Rs 71 crore in FY21. With the supply chain limitations imposed by China during the epidemic, several global procurers of specialty chemicals have been turning to India as an alternate source of specialized chemicals. Aether Industries Ltd should benefit from this.

Further Key Takeaways

Aether Industries Ltd is a company that specializes in advanced intermediates and specialty chemicals with complicated and unique chemistry. This allows the business to carve out a niche for itself and lower entry barriers.

As part of the IPO, the business proposes to issue 27.51 lakh equity shares to the public as part of the OFS. Because the OFS is a transfer of ownership, there will be no equity or EPS dilution. Instead, the company’s promoter shares will be reduced while public ownership would grow. As a consequence, the company’s free float will grow, which will aid in the listing.

Aether Industries’ IPO would include a new issue part valued at about Rs.757 crore. The firm has set aside a sum of Rs 136 crore from the new issue component of Rs 757 crore to bankroll its capital expenditure plans, Rs 212 crore to service the company’s debt, and Rs 165 crore to support the company’s working capital needs.

The company’s financials have always been strong. For the fiscal year FY21, the firm recorded sales revenues of Rs 454 crore, which has more than quadrupled in the past two years, indicating excellent top-line growth for the company.

At the same time, it recorded net profits of Rs 72 crore in FY21, approximately three times more than in FY19, boosting net profit margins. The company’s EBITDA has increased by more than 2.5 times in the previous two years, indicating strong top and bottom-line growth. This should have a favorable impact on stock prices.

Aether Industries Ltd began as a research and development unit in 2013 and just began commercial manufacturing in 2017. It serves India’s pharmaceutical, agrochemical, material science, electronic chemistry, high-performance photography, and oil and gas industries, among other high-growth industries.

Kotak Mahindra Capital Company and HDFC Bank will lead the IPO of Aether Industries Ltd. They will serve as the issue’s book running lead managers, or BRLMs.

Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.