Chemspec Chemicals Ltd IPO

Last Updated: 01 September 2022 11:10 AM by 5Paisa

Chemspec Chemicals, a leading manufacturer of critical additives for the FMCG ingredients, filed a DRHP with SEBI to raise funds worth Rs. 700 crores via a complete offer for sale. The OFS will comprise of sale of equity shares by promoters Bhaichand Amoluk Consultancy Services worth Rs. 233 crore, Mitul Vora worth Rs. 233 crores and Rushabh Vora worth Rs.233 crores.

Over the years, the company has evolved from a local supplier to FMCG companies in India to a supplier to multinational FMCG companies in 43 countries across five continents. Revenue from such companies constituted 86.67%, 88.88% and 89.76% of total revenue from operations in FY21, FY20 and FY19 respectively. JM Financial and Axis Capital are the lead managers to the public issue.
 
Objective of the Issue
The proceeds from the Issue will be utilised for:
- Increasing its brand visibility
- Enhancing its brand image
- Offering liquidity to unitholders
- Extending a public market for its equity shares

Chemspec Chemicals is a leading manufacturer globally of critical additives for FMCG ingredients used in skin and hair care products and intermediates for pharmaceutical APIs used in anti-hypertension drugs. As part of its FMCG product portfolio, it manufactures UV filters which are used as the primary ingredient in sunscreen lotions and creams, antibacterial soaps, anti-dandruff shampoos, and preservatives. The Company is also the largest manufacturer of ‘piroctone olamine’ in India, and the largest producer of ‘chemilide’ (an antibacterial ingredient) in the world with an approximate market share of 70% market share. The company manufactures these products at Taloja facility in Maharashtra which has a production capacity of 6,000 TPA and is approved by US FDA The firm has evolved from a local supplier to FMCG companies in India to a supplier to multinational FMCG companies in 43 countries including North America, Europe, the Asia Pacific region (APAC) including Japan, the Middle East and Africa

Entry barriers also include high cost of product development, complexity of the chemistry involved in manufacturing, time and cost involved in developing technologies and lengthy supplier qualification process
The principal raw materials used to manufacture the products include phenol derivatives, isobutylene derivatives, benzene and aniline derivatives, cresol derivatives, etc which are sourced from Indian manufacturers while some are imported from China and France. Its clientele includes Beiersdorf AG, Unilever Supply Chain Company AG, L’Oreal, DSM Nutritional Products, Godrej Consumers Products, Glenmark Life Sciences, Dr. Reddy's Laboratories, CTX Lifesciences etc.