SEBI Approves Archean Chemicals IPO

Archean Chemical Industries Ltd has sought the approval from the Securities Exchange Board of India to raise funds through an initial public offering. The IPO consists of a fresh issue of Rs 1,000 crore and an offer-for-sale of up to 19.07 million shares by its existing shareholders and promoters. The OFS will comprise up to 5.30 million shares by Chemikas Speciality LLP (CS LLP), up to 3.73 million shares by India Resurgence Fund Scheme I (IRF I), up to 6.30 million shares by India Resurgence Fund, Scheme II (IRF II) and up to 3.73 million shares by Piramal Natural Resources Pvt Ltd (PNRPL). CS LLP holds 41 percent stake in the company. IRF I has 7.46 percent stake, IFR II has 12.19 percent, PNRPL has 7.46 percent stake in the firm. IIFL Securities, ICICI Securities Ltd and JM Financial are the lead managers to the issue. The proceeds from the Rs 800-crore issue will be used to redeem non-convertible debentures fully or partly. As of December 2021, the amount outstanding under the borrowing arrangements entered by the firm was Rs 840 crore and interest accrued but not due was Rs 116.67 crore.

The firm is a leading specialty marine chemical manufacturer in India and focused on producing and exporting bromine, industrial salt, and sulphate of potash to customers around the world. It makes products from brine reserves in the Rann of Kutch, located on the coasts of Gujarat, at a facility near Hajipir in the state. As of September 2021, it marketed products to 13 global customers in 13 countries and to 29 domestic customers. In FY21, the company’s revenue from operations stood at Rs 740.76 crore as against Rs 608.17 crore a year ago. Net profit for the period reached Rs 66.61 crore against a loss of Rs 36.24 crore last year. As of September 2021, revenue from operations stood at Rs 450.51 crore while net profit at Rs 58.06 crore. Its total debt was at Rs 984.44 crore.