India: Chemplast Sanmar files DRHP to raise $466m via IPO

IPO

Chemplast Sanmar Ltd, which is backed by Canadian billionaire Prem Watsa, has filed a draft red herring prospectus (DRHP) with the Securities Exchange Board of India (Sebi) to raise Rs3,500 crore through an initial public offering (IPO).

Mint first reported on 6 April that the company was planning to go public.

Chemplast Sanmar’s IPO will consist of a fresh issue of Rs1,500 crore and an offer for sale of Rs2,000 crore by its current promoters and shareholders.

The offer for sale comprises sale of Rs1,850 crore by Sanmar Holdings Ltd and Rs150 crore by Sanmar Engineering Services Ltd.

The company is a part of the Chennai-based industrial conglomerate Sanmar Group, which has interests in chemicals, shipping and engineering. It manufactures paste PVC, chloro-chemicals, caustic soda, hydrogen peroxide, and refrigerant gases, and also has a contract manufacturing segment.

The proceeds from the issue will be used for an early redemption of non-convertible debentures (NCDs) worth Rs1,238.25 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 utilization of our internal accruals for further investment in business growth and expansion,” the company said in a DRHP.

“In addition, we believe that our improved leverage ratio, consequent to such redemption of NCDs, will improve our ability to raise debt in the future to fund potential business development opportunities and plans,” the company added.

For fiscal 2020, the company posted a total income of Rs1,265.51 crore against Rs1,266.77 crore last year. Net profit for the period stood at Rs46.13 crore versus Rs118.46 crore a year ago. As of December 2020, its net debt stood at Rs1,187.58 crore.

ICICI Securities, Axis Capital Ltd and a few other investment banks are advising the company on the IPO.

This article was first published on livemint.com.

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.