Speciality Chemicals company is looking to raise ~₹600 crores through capital markets.
Laxmi Organic Industries is leading manufacturer of Acetyl Intermediates and Specialty Intermediates with almost three decades of experience in large scale manufacturing of chemicals. Company is currently among the largest manufacturers of ethyl acetate in India with a market share of approximately 30% of the Indian ethyl acetate market (source: Frost & Sullivan Report). It is the only manufacturer of diketene derivatives in India with a market share of approximately 55% of the Indian diketene derivatives market in terms of revenue in Fiscal 2020 and one of the largest portfolios of diketene products (source: Frost & Sullivan Report).
| IPO Opens | IPO Closes | Price Band (₹/Sh) | Listing Date |
|---|---|---|---|
| 15-Mar-2021 | 17-Mar-2021 | 129 to 130 | 25-Mar-2021 |
Over the years, have significantly expanded scale of operations and global footprint with customers in over 30 countries including China, Netherlands, Russia, Singapore, United Arab Emirates, United Kingdom and United States of America. Have established long-standing relationships with marquee players including Syngenta Asia Pacific Pte. Ltd., Alembic Pharmaceuticals Limited, Covestro (India) Private Limited, Dr. Reddy’s
Laboratories Limited, Flint Group India Private Limited, Granules India Limited, Hetero Labs Limited, Heubach Colour Private Limited, Hubergroup India Private Limited, Huhtamaki India Limited, Laurus Labs Limited, Macleods Pharmaceuticals Private Limited, Mylan Laboratories Limited, Neuland Laboratories Limited, Parikh Packaging Private Limited, Suven Pharmaceuticals Limited, Colourtex Industries Private Limited, and UPL Limited.
Have offices in Leiden (Netherlands), Shanghai (China) and Sharjah (United Arab Emirates) which enables us to assess international demand and increase customer outreach thereby bolstering product development initiatives. We also have arrangements with third parties for usage of storage tanks in inter alia Mumbai for storage of raw materials and finished goods and Rotterdam (Netherlands), Antwerp (Belgium) and Genoa (Italy) for storage of finished products which enables to deliver products on short notice.
Have been the largest exporter of ethyl acetate from India in the six months ended September 30, 2020 and Fiscals 2020, 2019 and 2018 and one of the largest exporters of ethyl acetate to Europe from India since 2012 (source: Frost & Sullivan Report). For the six months ended September 30, 2020 and the Fiscals 2020, 2019 and 2018, Company’s revenue from exports of manufactured products contributed 23.17%, 24.24%, 27.80% and 22.18%, respectively, of revenue from operations on a standalone basis. Company’s revenue from exports on a standalone basis have grown at a CAGR of 5.89% between Fiscal 2018 and the six months ended September 30, 2020 (annualized).
Company currently have two manufacturing facilities in Mahad, Maharashtra (the “Manufacturing Facilities”), with one facility dedicated to Acetyl Intermediates (the “AI Manufacturing Facility”) and another dedicated to Specialty Intermediates (the “SI Manufacturing Facility”), which are strategically located in proximity to several ports and each other. As at December 31, 2020, the aggregate installed production capacity at the AI Manufacturing Facility was 161,320 MTPA, while the aggregate installed production capacity at the SI Manufacturing Facility was 78,045 MTPA. It is also in the process of acquiring YCPL, having an aggregate installed production capacity of 10,500 MTPA of acetaldehyde and 29,200 MTPA of ethyl acetate as on December 31, 2020.
Have offices in Leiden (Netherlands), Shanghai (China) and Sharjah (United Arab Emirates) which enables us to assess international demand and increase customer outreach thereby bolstering product development initiatives. We also have arrangements with third parties for usage of storage tanks in inter alia Mumbai for storage of raw materials and finished goods and Rotterdam (Netherlands), Antwerp (Belgium) and Genoa (Italy) for storage of finished products which enables to deliver products on short notice.
Have been the largest exporter of ethyl acetate from India in the six months ended September 30, 2020 and Fiscals 2020, 2019 and 2018 and one of the largest exporters of ethyl acetate to Europe from India since 2012 (source: Frost & Sullivan Report). For the six months ended September 30, 2020 and the Fiscals 2020, 2019 and 2018, Company’s revenue from exports of manufactured products contributed 23.17%, 24.24%, 27.80% and 22.18%, respectively, of revenue from operations on a standalone basis. Company’s revenue from exports on a standalone basis have grown at a CAGR of 5.89% between Fiscal 2018 and the six months ended September 30, 2020 (annualized).
Company currently have two manufacturing facilities in Mahad, Maharashtra (the “Manufacturing Facilities”), with one facility dedicated to Acetyl Intermediates (the “AI Manufacturing Facility”) and another dedicated to Specialty Intermediates (the “SI Manufacturing Facility”), which are strategically located in proximity to several ports and each other. As at December 31, 2020, the aggregate installed production capacity at the AI Manufacturing Facility was 161,320 MTPA, while the aggregate installed production capacity at the SI Manufacturing Facility was 78,045 MTPA. It is also in the process of acquiring YCPL, having an aggregate installed production capacity of 10,500 MTPA of acetaldehyde and 29,200 MTPA of ethyl acetate as on December 31, 2020.
Promoters of Laxmi Organic Industries are Yellow Stone Trust and Ravi Goenka
Laxmi Organic Industries is looking to raise ~₹600 crores through this IPO. The objects of the Offer are to (i) to carry out investment in capex, working capital and Prepayment or repayment of all or a portion of certain outstanding borrowings; and (ii) genreal corporate purpose
About Industry
The global chemicals market is valued at around USD 4,738 Bn. India accounts for ~3.5% market share in the global chemicals market. Specialty chemicals are low-volume and high-value products which are sold on the basis of their quality or utility, rather than composition. Thus, they may be used primarily as additives or to provide a specific attribute to the end product. The global Acetyl market is projected to grow at 6.4% growth rate over the next five years owing to strong demand from end use applications. The Acetyl market is valued at USD 13.4 Bn in 2019 which is expected to reach USD 18.3 Bn by the end of year 2024.
Key Pointers
- Leading manufacturer of ethyl acetate with significant market share
- Only Indian manufacturer of diketene derivatives with a significant market share and one of the largest portfolios of diketene products
- Diversified customer base across high growth industries and long-standing relationships with marquee customers
- Strategically located manufacturing facilities, vertical integration and supply chain efficiencies
- In-house research and development capabilities and consistent track record of technology absorption
- Global presence and low geographical concentration
- Differentiated business model, asset base, product mix and experience in handling complex chemistries create high entry barriers
- Experienced promoter, board of directors and key managerial personnel
- Volume maximisation at Manufacturing Facilities by expanding installed capacities to support growth initiatives
Laxmi Organic Industries IPO Snapshot
| Issue Open | 15-Mar-2021 |
| Issue Close | 17-Mar-2021 |
| Face Value | ₹ 2/- |
| Price Band | ₹ 129 to ₹ 130 (Including premium of ₹ 127 to ₹ 128 per share) |
| Discount | Nil |
| Bid Lot | 115 shares and in mutiples |
| Listing on | BSE and NSE |
| Mode of Payment | UPI / ASBA (Mandatory); Applications using third party UPI/ASBA Bank accounts are liable to rejected |
Laxmi Organic Industries Issue & Subscribed Details
| Particulars | Issued | Subscribed |
|---|---|---|
| Issue Size | ₹600 Crores (Upper Band) | ₹ - Crores |
| QIB Portion | ~50% | 175.4 times |
| NII Portion (Application for lot size of 15 & above) | ~15% | 217.6 times |
| Retail Portion (Applications for lot size between 1 & upto 15) | ~35% | 17.6 times |
| Employees Portion | NA | NA |
| Total | 100% | 105.6 times |
Laxmi Organic Industries IPO Indicative Dates
| Issue Open | 15-Mar-2021 |
| Issue Close | 17-Mar-2021 |
| Anchor Investor Bidding | One working day prior to Issue opening date of 15-Mar-2021 (around 12-Mar-2021) |
| Announcement of Allotment | 22-Mar-2021 |
| Initiation of Refunds | 23-Mar-2021 |
| Credit of Shares | 24-Mar-2021 |
| Listing (Commencement of trading on Stock Exchanges) | 25-Mar-2021 |
Lead Managers of Laxmi Organic Industries IPO
List of Book Running and Lead/Co-Lead Manager/s
| Axis Capital Limited |
| DAM Capital Advisors Limited |
Registrar of Laxmi Organic Industries IPO
| Link Intime (India) Private Limited |
Valuation
Company is looking at the following valuation
| Issue Size | ₹ 600 Crores (Upper Band) |
| Pre-Issue Promoter's Holding | _% |
| Post Issue Promoter's Holding | TBA% |
| Pre-Issue Shares | TBA Crores |
| Post Issue Shares | TBA Crores |
| Post Issue Market Cap (based on Price band) | ₹ TBA to ₹ TBA Crores |
Check Allotment Status of Laxmi Organic Industries IPO
| Please check below or visit here to check allotment status of IPO |
Source: DRHP, RHP, Company, Company Website | Logo/Images published in the article may be copyright of respective companies.
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