The ₹808-crore initial public offering (IPO) of specialty chemicals firm Aether Industries is going to hit the markets on May 24. The issue, whose price band has been fixed at ₹610-642 per share, will close on May 26. The likely date for share listing is June 3.
About the issue: Of ₹808.04 crore, the company aims to raise ₹627 crore through fresh issues and the remaining ₹181.04 crore via offer for sale (OFS) for up to 28.2 lakh shares by existing shareholders and promoters.
Lot size: Aether Industries' initial public offering lot size is 23 shares. A retail-individual investor can apply for up to 13 lots. At the upper end of the price band, one lot of shares will cost investors ₹14,766.
About the firm: Incorporated in 2013, Aether is a specialty chemical manufacturer in India focused on producing advanced intermediates and specialty chemicals involving complex and differentiated chemistry and technology core competencies. Aether is among the few Indian specialty chemical companies to have successfully launched these 3 separate business models in just 5 years into commercial manufacturing. As of March 31, 2022, Aether’s product portfolio comprised over 25 products and sold to more than 34 global companies in 18 countries to over 154 domestic companies.
Objective: As per the DHRP, the funds raised via the issue will be used for funding capital expenditure requirements for the Proposed Greenfield Project, prepayment or repayment of all or a portion of certain outstanding borrowings availed by the company, funding working capital requirements of the company; and other general corporate purposes.
Financials: Aether is one of the fastest-growing specialty chemical companies in India, growing at a CAGR of nearly 49.5 percent between FY19-21. The company's total revenue grew to ₹454.79 crore in FY21, from ₹303.78 crore in FY20. Its net profit also climbed to ₹71.12 crore in FY21 from ₹39.95 crore in the previous year.
For the nine months ended December 31, 2021, the company reported a net profit of ₹82.9 crore with total revenue of ₹449.31 crore.
Reservation: The company has reserved 50 percent of equity shares for qualified institutional buyers, whereas 15 percent of shares are allocated for non-institutional investors. Retail bidders will get the remaining 35 percent of the offer.
Book Managers and Registrar: HDFC Bank and Kotak Mahindra Capital Company are the book running lead managers to the issue, whereas Link Intime has been appointed as the registrar to the issue.
Specialty chemicals market: As per Axis Capital, factors driving the growth in India's Speciality Chemicals market include:
• Growth in End-Use Segments,
• Supply chain de-risking driven by China downturn,
• Accelerated R&D and capital expenditure,
• GoI support and “Make in India” campaign,
• Availability of feedstock,
• Improved safety, health and environment compliance and “Green chemistry”.
Listed Peers: Clean Science and Technology, PI Industries, Fine Organic Ind, Vinati Organics and Navin Fluorine are listed peers of the firm. among them, PI industries gave reported the highest revenue for FY21 at ₹4,700 crore followed by Navin fluorine at ₹1,258 crore. Aether's revenue for FY21 at ₹455 crore is the lowest amongst listed peers.
