Laxmi Organic Industries IPO: Date, issue size, Face value, price band, bid lot, all details highlights by GEPL Capital

Laxmi Organic Industries IPO date: Laxmi Organic Industries to issue Equity Shares aggregating upto ₹ 600 Cr (Fresh Issue of Equity shares aggregating upto ₹ 300 Cr and Offer for sale of equity shares aggregating upto ₹ 300 Cr). The Face value of the IPO is Rs 2. The Issue summary Price band is Rs 129 – Rs 130. The Bid Lot is 115 Shares and in multiple thereof.  Post Issue Implied Market Cap is Rs 3404 cr – Rs 3428 cr. Book Running lead manager are Axis Capital and DAM Capital and the Registrar is Link Intime India. Issue opens on Monday, 15th Mar’2021 and closes on Wednesday, 17th Mar’2021.
 
Laxmi Organic Industries was incorporated on May 15, 1989. The company is a leading manufacturer of Acetyl Intermediates and Specialty Intermediates with almost 3 decades of experience in large scale manufacturing of chemicals. Laxmi Organic is currently among the largest manufacturers of ethyl acetate in India with a market share of approximately 30% of the Indian ethyl acetate market.

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Laxmi Organic Industries products are currently divided into 2 broad categories, namely the Acetyl Intermediates (“AI”) and the Specialty Intermediates (“SI”). The Acetyl Intermediates include ethyl acetate, acetaldehyde, fuel-grade ethanol and other proprietary solvents, while the Specialty Intermediates comprises of ketene, diketene derivatives namely esters, acetic anhydride, amides, arylides and other chemicals. Laxmi Organic is the only manufacturer in India of diketene derivatives with a market share of approximately 55 % in terms of revenue in Fiscal 2020.

Laxmi Organic also proposes to diversify into manufacturing of specialty fluorochemicals to which end, they have recently acquired assets including plant & machinery, design and operating paperwork, REACH registrations and patents of Miteni, a manufacturer of organic fluorospecialties and electrochemical fluorination.
Further, post completion of the Yellowstone Chemicals (“YCPL”) Acquisition, their market share in the ethyl acetate market will be further enhanced. Industries Catered - pharma, agrochem, paints & coatings, printing, packaging, dyes & pigments.

Laxmi Organics Industries Valuation & Recommendation:

Laxmi Organics Industries will continue to leverage their know-how in complex chemistries and their experience in engineering to focus on the addition of downstream and value-added products to their product portfolio as well as addition of fluorospecialty products to their portfolio. The offer is priced at an annualized PE of 32x on H1FY21 which is fairly priced as compared with peers. GEPL Capital recommend a SUBSCRIBE rating to the issue.