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.
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.
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.