After the successful listing of Polycab India and Metropolis Healthcare last week, the markets are now looking at the initial public offering (IPO) of specialty chemicals maker Neogen Chemicals. The Rs 132 crore IPO will be open for subscription from April 24 to 26. The company is offering shares, with a face value of Rs 10 each, in the price band of Rs 212-215 per piece. The stock will list on BSE and NSE on May 8.
Neogen Chemicals is said to be raising around Rs 70 crore through fresh issue of shares. Besides that, the promoters of Neogen Chemicals, Haridas Thakarshi Kanani and Beena Haridas Kanani would also be offloading up to 2.9 million shares.
The net proceeds from the fresh issue of Neogen Chemicals are proposed to be utilised for prepayment or repayment of loans, long-term working capital and general corporate purposes.
Inga Advisors is the book running lead manager of the issue while Batlivala & Karani Securities India is the co-book running lead manager to the offer.
Market experts suggest investors with a medium- to long-term view to subscribe to the issue as Neogen Chemicals is at the peak of its expansion phase that can lead to revenue growth in future.
Currently, the manufacturing units of the company are located in Navi Mumbai in Maharashtra and Karakhadi, Vadodra, in Gujarat. Neogen is planning to set up new units at the Vadodra facility and also working on a new facility at Dahej, Gujarat, which is going to be a green-field facility for manufacturing inorganic chemical products.
Neogen Chemicals has grown at 20% CAGR (compounded annual growth rate) in revenue and 30% CAGR in terms of profits in the last five years.
Neogen Chemicals is one of the leading manufacturers of bromine-based, and lithium-based specialty chemicals. As on February 28, it manufactured an aggregate of 198 products comprising 181 organic chemicals and 17 inorganic chemicals. Its major competitors in India include Aarti Industries, Atul Industries, Navin Fluorine, Vinati Organics, and Paushak among others.
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