Home / Companies / News /  SH Kelkar and Co. prices IPO at Rs173-180, to raise Rs510 crore

Global private equity firm Blackstone-backed fragrance and flavour company S.H. Kelkar and Co. Ltd on Tuesday announced that it will open its initial public offering (IPO) on 28 October, to raise almost 510 crore. The issue will close on 30 October.

The firm has priced its IPO in the range 173-180 per share.

Blackstone invested in the company in 2012 and presently holds a 33.28% stake. It is selling an almost 10% stake through the IPO.

As part of the IPO, the firm will raise 210 crore through the issue of fresh shares, of which a majority will be utilized to reduce the firm’s debt, which stands at 170 crore. The firm will also use the proceeds for investment in its subsidiary.

The promoters are also selling a small part of their stake in the IPO.

The firm, founded in 1922, has four manufacturing facilities, three of which are located in India (Mumbai, Vapi and Raigad) and one in the Netherlands, with a total installed manufacturing capacity of more than 19,819 tonnes annually.

SH Kelkar’s fragrance products and ingredients are used as a raw material in personal washes, fabric care, skin and hair care, fine fragrances and household products. Its flavour products are used as a raw material by producers of baked goods, dairy products, beverages and pharmaceutical products.

The company exports fragrance products to 52 countries and its flavour products are exported to almost 15 countries.

In fiscal year 2015, SH Kelkar reported revenue of 837 crore, compared with 761.3 crore the previous year. The firm’s revenue has grown at a compounded annual growth rate (CAGR) of 16% over the last four fiscal years.

The firm derives 94% of its revenue from the fragrance business, while the flavours business contributes the rest. In 2013, the firm had a 12% market share in the Indian fragrance market.

JM Financial Institutional Securities Ltd and Kotak Mahindra Capital Co. Ltd are managing the issue for SH Kelkar, while Keynote Corporate Services Ltd is acting as the adviser.

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