Chemplast Sanmar files initial papers with SEBI for ₹3,500-cr IPO

Our Bureau Chennai | Updated on May 03, 2021

To hit capital market after delisting in 2012

Chennai-based Chemplast Sanmar Ltd, a leading manufacturer of chemicals and allied products, has filed a draft red herring prospectus (DRHP) with the Securities Exchange Board of India to raise ₹3,500 crore through an initial public offering (IPO).

The proposed IPO of the company, which was delisted in 2012, comprises a fresh issue of equity shares worth ₹1,500 crore and an offer for sale of ₹2,000 crore by its current promoters and shareholders, according to DRHP. The offer for sale comprises the sale of ₹1,850 crore by Sanmar Holdings Ltd and ₹150 crore by Sanmar Engineering Services Ltd.

To meet NCD redemptions

The proceeds from the issue will be used for an early redemption of non-convertible debentures (NCDs) worth ₹1,238.25 crore.

“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,” the company, which is part of the Sanmar Group, said in the draft prospectus. Started in 1962, Sanmar Group has established a dominant position in niche chemical products, and it is one of the large South Indian Conglomerates with revenues of more than $1 billion and a more than $1.5 billion asset base, with 100 per cent or the majority holdings in all its businesses such as chemicals, engineering technologies and shipping. The group has operations in the US, Mexico and Egypt, apart from its significant presence in south India.

For FY20, the company’s total income stood at ₹1,265.51 crore against ₹1,266.77 crore in the previous year. Net profit was at ₹46.13 crore versus ₹118.46 crore in FY19. As of December 2020, its net debt stood at ₹1,187.58 crore.

ICICI Securities and Axis Capital among other investment banks are advising the company on the IPO.

Published on May 03, 2021

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