Chemplast Sanmar IPO – Issue opens on 10 August – Know price band, other key details

The IPO OF Chemplast Sanmar Limited (CSL) will open on 10 August and end on 12 August. The issue is worth Rs 3,850 cr out of which, fresh equity shares worth Rs 1,300 cr will be available for subscription along with an Offer For Sale (OFS) of shares aggregating up to Rs 2,550 cr. The information is available on the Red Herring Prospecus (RHP) filed by the company with the market regulator Securities and Exchange Board of India (SEBI). The RHP is available on the NSE.   

The price bank of Chemplast Sanmar IPO is Rs 530-54. 

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The equity shares are of face value of Rs 5 per share. The shares aggregating up to Rs 2463.44 cr are being offered by Sanmar Holdings Limited which is the promoter shareholding. Meanwhile, equity shares aggregating up to Rs 86.56 cr by Sanmar Engineering Services Limited. 

CSL is a specialty chemicals manufacturer in India with focus on specialty paste PVC resin and custom manufacturing of starting materials and intermediates for pharmaceutical, agro-chemical and fine chemicals sectors, the company said in its RHP.  

CSL is also the third largest manufacturer of caustic soda and the largest manufacturer of hydrogen peroxide, each in the States of Tamil Nadu, Karnataka, Telangana, Andhra Pradesh, Kerala and Union Territory of Puducherry on the basis of installed production capacity as of December 31, 2020, the company has claimed in its RHP. 

The company will utilise the net proceeds of IPO towards early redemption of the non-convertible debentures (NCDs) and for general corporate purposes. 

“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 utilisation of our internal accruals for further investment in business growth and expansion," Chemplast Sanmar said in the red herring prospectus. "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," it added. 

ICICI Securities, Axis Capital, Credit Suisse Securities (India) Private Ltd, IIFL Securities, Ambit, BOB Capital Markets, HDFC Bank, IndusInd Bank and Yes Securities are the merchant bankers to the issue. 

75% of the net issue is reserved for qualified institutional buyers (QIBs), whereas 15% stake will be allotted to non-institutional investors and 10% to retail investors. Investors can bid for a minimum of 27 equity shares and in multiple of 27 equity shares thereafter.