Pi Industries Ltd, an agrochemical formulations company, is looking to raise up to ₹2,000 crore through a qualified institutional placement (QIP) in March, said two people aware of the development.
“The company is looking to use the funds towards capital expenditure requirements, as well as to expand its product portfolio," one of the two people cited above said, requesting anonymity.
QIP is a capital-raising tool through which listed companies can sell shares, fully and partly convertible debentures, or any securities other than warrants that are convertible into equity shares, to qualified institutional buyers.
In an exchange filing dated 19 February, the company said it will raise the funds in one or more tranches, by issuance of equity shares and/or other eligible securities by way of QIP. The company plans to use the capital to for funding growth opportunities, long-term capital requirements, investments in subsidiary(ies), joint venture(s) and affiliate(s), general corporate requirements, and pre-payment and or repayment of outstanding borrowings.
The company has hired Kotak Mahindra Capital, Citigroup and Axis Capital as advisers for the capital-raising plan, the person added.
Pi Industries confirmed it has sought shareholders’ approval for passing a special resolution for issuance of shares through QIP, but said it was still in the process of finalisation of bankers for the process. E-mails written to Axis Capital and Kotak Mahindra Capital remained unanswered, while Citi declined to comment on the matter.
Pi Industries, which began as an edible oil refinery, later entered the agrochemical formulations business, and currently operates in the domestic agricultural inputs and contract manufacturing exports segment. While the contract manufacturing exports contributes to nearly 60% of its sales, the domestic agricultural inputs business forms the rest.
The company primarily deals with agrochemicals and plant nutrients under its domestic agrochemical business, while in the contract manufacturing exports segment, it deals with custom synthesis and contract manufacturing of chemicals, which constitutes evaluation of chemical processes, process development, lab and pilot scale-up, as well as commercial production.
The company has three agrochemical formulation facilities and five multipurpose plants in Panoli, Gujarat, three multipurpose plants in Jambusar, Gujarat, and a research and development (R&D) unit in Udaipur.
The company’s sales rose 23.3% to ₹2,511 crore in the first nine months of fiscal year 2020, compared to the corresponding period in the previous fiscal. During the period, its profit rose 21.5% to ₹344 crore, while its earnings before interest, tax, depreciation and amortization (Ebitda) rose 31.7% to ₹529 crore. The company’s total debt net of cash on consolidated basis, as on 31 December, stood at ₹252 crore.