Gandhar Oil Refinery (India) gets green signal from Sebi to launch its proposed IPO; key highlights here

Leading manufacturer of white oils by revenue terms, Gandhar Oil Refinery (India) has received market regulator Sebi's approval for its proposed initial public offering (IPO). The public offer is a combination of a fresh issue and an offer for sale (OFS). The price band and IPOs' important dates will be announced in due course.

The company received an 'observation letter' for its IPO from Sebi on June 23, 2023.

Gandhar filed its draft prospectus on December 23 last year.

The IPO consists of a fresh issue worth ₹357 crore and an offer for sale (OFS) of up to 12,036,380 equity shares by selling shareholders.

Under offer for sale, 6.75 million equity shares will be offloaded by Promoter Selling Shareholders (Ramesh Babulal Parekh, Kailash Parekh, and Gulab Parekh), and up to 5.27 million equity shares by existing investors including (Green Desert Real Estate Brokers, Denver Bldg Mat & Décor TR LLC, Fleet Line Shipping Services LLC, IDFC First Bank Limited and Amitabh Mishra.

Proceeds from the fresh issue will be used for funding --- a) investment in Texol by way of a loan for financing the repayment/pre-payment of a loan facility availed by Texol from the Bank of Baroda; b) capital expenditure through the purchase of equipment and civil work required for (i) expansion in capacity of automotive oil at Silvassa Plant; (ii) expansion in capacity of petroleum jelly and accompanying cosmetic product division at Taloja Plant; and (iii) expansion in capacity of white oils by installing blending tanks at our Taloja Plant; c) funding working capital requirements; and d) general corporate purposes.

For the IPO, Edelweiss Financial Services and ICICI Securities are the book-running lead managers.

Gandhar Oil Refinery is India’s largest manufacturer of white oils by revenue in FY22, including domestic and overseas sales, and is one of the top five players globally in terms of market share in CY21, as per Crisil's report.

As of June 30, 2022, the company's product suite comprises over 350 products primarily across the personal care, healthcare, and performance oils (“PHPO”), lubricants, and process and insulating oils (“PIO”) divisions under the “Divyol” brand.

The company sells its products in over 100 countries across the globe, catering to 3,529 customers in FY22, including leading Indian and global companies such as Procter & Gamble (“P&G”), Unilever, Marico, Dabur, Encube, Patanjali Ayurved, Bajaj Consumer Care, Emami, and Amrutanjan Healthcare.

Also, the company operates three manufacturing facilities with a combined annual production capacity of 497,403 kL as of June 30, 2022 (enhanced to 522,403 KL in October 2022), with plants located in Taloja, Maharashtra, the Union Territory of Silvassa, Dadra, and Nagar Haveli, Daman and Diu and Sharjah, United Arab Emirates.