Chemicals manufacturing company, Rossari Biotech Ltd (RBL), has taken IPO route to raise around Rs 500 crore. The IPO will consist of Rs 50 crore of fresh issue and Rs 450 crore worth of OFS (by promoters). The issue opens on July 13 (today) and closes on July 15. It is priced at Rs 423-425 per piece.
The funds raised from fresh issue and the Pre-IPO placement will be used for debt repayment which is about Rs 65 crore and Rs 50 crore will be deployed for working capital requirements. The remaining funds will be used for general corporate purposes. With this IPO, the promoters will reduce their stake in the company from 95.1 per cent (pre-IPO) to 72.7 per cent.
As per the records, over FY17-20, RBL has recorded revenue/ EBITDA/ PAT CAGR of 32.3 per cent / 63.4 per cent/ 65.9 per cent with EBITDA margin expansion of 820 bps to 17.5 per cent.
According to Motilal Oswal report, the company would repay loans taken for recent capex through IPO proceeds; thus becoming debt free again.
RBL has a well-diversified product portfolio comprising 2,030 different products across three categories — home, personal care and performance chemicals (HPPC; 47 per cent revenue share); textile specialty chemicals (TSC; 44 per cent share) and animal health and nutrition products (AHNP; 10 per cent share). RBL caters to pan-India through 204 distributors and to 17 countries through 29 distributors, according to Motilal Oswal.
The company's top five customers contribute 44 per cent while 10 customers contribute around 54 per cent to the revenue, stated Motilal Oswal report. “RBL does not have any long term agreements with most of its customers, and thus the loss of any customer or a reduction in the demand for its products could adversely affect its business.”
