Safex Chemicals is in the process of bringing its initial public offering (IPO) of ₹450 crore in the near future. The speciality chemicals company has filed a Draft Red Herring Prospectus (DRHP) with the capital markets regulator, Securities and Exchange Board of India (SEBI), to bring the issue, which combines a fresh issue of ₹450 crore and an offer for sale (OFS) up to 3,57,34,818 shares.
The offer also includes a subscription reservation by eligible employees in the employee reservation portion.
The offer is being made through the book-building process, wherein not more than 50 per cent of the offer is allocated to qualified institutional buyers, and not less than 15 per cent and 35 per cent of the offer is assigned to non-institutional and retail individual bidders, respectively.
According to the company, the proceeds from the fresh issue to the extent of ₹255.59 crore will be used for the repayment or prepayment of certain or all of the borrowings availed by it.
Besides, about ₹110 crore of the proceeds will be used to repay or prepay certain or all of the borrowings taken out by its subsidiary, Shogun Organics.
Some parts of the net proceeds will be used for general corporate purposes.
Axis Capital Limited, JM Financial Limited and SBI Capital Markets Limited are the book-running lead managers of the issue, while KFin Technologies is the registrar to the offer.
Safex Chemicals business overview
Incorporated in 1991, Safex Chemicals is a specialty chemicals company with a focus on agrochemicals.
It operates in branded formulation, speciality chemicals and contract development and manufacturing (CDM”) verticals, catering to the needs of farmers and global agrochemical companies.
For the financial year 2022-23 (FY23), the company’s revenue from operations stood at ₹1,161.02 crore, which rose to ₹1,404.59 crore in FY24 and ₹1,584.78 crore in FY25.
However, the company has been incurring losses in the last three financial years. In FY23, it suffered a loss of ₹1.02 crore, in FY24 ₹22.79 crore and in FY25 ₹14.29 crore.
EBITDA for FY23, FY24 and FY25 stood at ₹149.06 crore, ₹118.65 crore and ₹233.03 crore, respectively.
EBITDA margin for FY23, FY24 and FY25 stood at 12.84 per cent, 8.45 per cent and 14.70 per cent, respectively.
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