INDIA - Kronox Lab Sciences Limited, a Vadodara-based specialty chemical manufacturer, has announced its filing for an initial public offering (IPO) with the Securities and Exchange Board of India (SEBI). The company is aiming to raise ₹150 crore, leveraging its strong position in the production of high-purity specialty fine chemicals. The proposed public offering will consist of fresh equity shares totaling ₹45 crore and an offer for sale (OFS) of 78 lakh shares by existing shareholders.
The funds from the IPO are earmarked for enhancing working capital and supporting general corporate activities. The company's financial performance has been robust, with revenues for Fiscal Year 2023 reaching ₹95.6 crore, representing a compound annual growth rate (CAGR) of 24% from FY21-23. Profits after tax for the same period grew at a CAGR of 31%, culminating in ₹16.6 crore with a return on equity (RoE) of 37.2%.
Kronox Lab Sciences has established itself as an import substitution player, exporting to over twenty countries, including notable markets like Australia and Egypt. The company's product portfolio exceeds 185 items, serving a wide range of industries such as pharmaceuticals, biotech, and nutraceuticals. The IPO is expected to debut on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
The company has outlined the allocation of shares for the upcoming IPO, with up to half reserved for Qualified Institutional Buyers, a minimum of 15% for Non-Institutional Investors, and at least 35% for Retail Individual Investors. Pantomath Capital Advisors is managing the book-building process, while KFin Technologies has been appointed as the registrar for the IPO.
Kronox Lab Sciences is debt-free and has demonstrated strong financial discipline with actions including two buybacks and one bonus issue. The company's EBITDA stood at ₹22 crore in FY23, though margins have narrowed due to cost pressures. Despite this, the company has maintained profitability, with profits of ₹6.38 crore from revenues of ₹25.95 crore (INR10 crore = approx. USD1.2 million) by June FY24.
The IPO details disclosed today reveal a company with a solid financial foundation, a diverse product range, and a strategic focus on growth through working capital enhancement and corporate activities. The listing on BSE and NSE will provide investors with an opportunity to participate in Kronox Lab Sciences' continued expansion and success in the specialty chemicals market.
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