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Hemani Industries, a company that manufactures a range of agrochemicals and speciality chemicals, has filed its Draft Red Herring Prospectus (DRHP) with market regulator SEBI.
The IPO consists of a fresh issue of shares aggregating up to ₹500 crore and an Offer for Sale aggregating up to ₹1,500 crore by the selling shareholders from the Promoter and Promoter Group. The total IPO size is ₹2,000 crore.
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Market debut IPO activity likely to remain muted for the next few weeks due to high volatilityPromoters Jayesh Mohan Dama, Mohan Sunderji Dama and Minal Mohan Dama will each be offering equity shares aggregating up to ₹500 crore as part of the OFS.
The company may also consider a private placement of ₹100 crore before filing the red herring prospectus with the registrar of companies. If the pre-IPO placement is undertaken, the amount raised from the pre-IPO placement will be reduced from the fresh issue accordingly.
Profit, revenue numbers
Hemani Industries is an agrochemicals and specialty chemicals manufacturer that caters to the crop protection, wood protection, veterinary sciences, household health, and public health industries. In addition to its products, the company also engages in contract research and manufacturing services (CRAMS).
The company clocked a consolidated profit of ₹169.4 crore in FY21 against ₹133.5 crore in the previous year. Profit for the six-month period ended September 2021 stood at ₹268.95 crore (₹112.76 crore). Revenue from operations climbed 17.19 per cent from ₹1,000 crore in fiscal 2020 to ₹1,171.9. crore in fiscal 2021.
The company has grown at a CAGR of 15.2 per cent for FY19-FY21. Its operating EBITDA margin has grown from 15.92 per cent in FY19 to 21.14 per cent in FY21. Its PAT margin has also expanded from 8.49 per cent in FY19 to 14.31 per cent in FY21, it said.
It operates three strategically located manufacturing facilities at Dahej, Ankleshwar and Saykha. It intends to use the proceeds of the IPO to fund the capacity expansion at its Saykha facility, along with prepayment/repayment of debt, and working capital.
Present across entire value chain
The company is present across the entire value chain – Technicals, Formulations and Intermediates. According to Frost & Sullivan, it wasa leading player in the Indian pyrethroid market in fiscal 2021. In CY2020, it was the largest global producer by volume of Meta Phenoxy Benzaldehyde (MPBD) and the second largest producer by volume of Cypermethrin Acid Chloride (CMAC). It holds leadership position in Technicals as well – in CY2020, it was the largest global producer by volume of Cypermethrin Technical, the second largest global producer by volume of Alpha Cypermethrin, the third largest global producer by volume of Permethrin Technical and the third largest manufacturer by volume of Dicamba in India, as per Frost & Sullivan.
The company is largely focused on exports, with presence in Asia Pacific, Latin America, the US, Russia, Africa and Australia. It derives 60-70 per cent of its revenue from exports.
It has catered to over 1,700 customers in the last 10 years. Some of its marquee clients include Alchemie Overseas, Arysta LifeScience Benelux, Bayer Vapi, Dhanuka Agritech, Jiangsu Yangnong Chemical, Shandong Rainbow Agrosciences and UPL Limited.
JM Financial Limited and Kotak Mahindra Capital Company Limited are the Book Running Lead Managers to the IPO.
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