BackChemplast Sanmar files papers for ₹3.5k cr IPO
Chemplast Sanmar Ltd, which is backed by Canadian billionaire Prem Watsa, has filed a draft red herring prospectus (DRHP) with the Securities Exchange Board of India (Sebi) to raise ₹3,500 crore through an initial public offering (IPO)
PremiumChemplast Sanmar Ltd, which is backed by Canadian billionaire Prem Watsa, has filed a draft red herring prospectus (DRHP) with the Securities Exchange Board of India (Sebi) to raise ₹3,500 crore through an initial public offering (IPO).
Mint had first reported on 6 April that the company was planning to go public.
Chemplast Sanmar’s IPO will consist of a fresh issue of ₹1,500 crore and an offer for sale of ₹2,000 crore by its current promoters and shareholders.
The offer for sale comprises the sale of ₹1,850 crore by Sanmar Holdings Ltd and ₹150 crore by Sanmar Engineering Services Ltd.
The company is part of Chennai-based industrial conglomerate Sanmar Group, which has interests in chemicals, shipping and engineering.
It manufactures paste PVC, chloro-chemicals, caustic soda, hydrogen peroxide, and refrigerant gases, and also has a contract manufacturing segment.
The proceeds from the issue will be used for an early redemption of non-convertible debentures (NCDs) worth ₹1,238.25 crore, the company said.
“The early redemption of the NCDs in full will help reduce our outstanding indebtedness and debt servicing costs, assist us in maintaining a favourable debt to equity ratio, and enable utilisation of our internal accruals for further investment in business growth and expansion," Chemplast Sanmar said in the draft prospectus.
“In addition, we believe that our improved leverage ratio, consequent to such redemption of NCDs, will improve our ability to raise debt in the future to fund potential business development opportunities and plans," the company said.
For fiscal 2020, the company posted a total income of ₹1,265.51 crore against ₹1,266.77 crore in the previous year.
Net profit for the period stood at ₹46.13 crore versus ₹118.46 crore a year ago. As of December 2020, its net debt stood at ₹1,187.58 crore.
ICICI Securities, Axis Capital Ltd and a few other investment banks are advising the company on the IPO.
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