Rossari Biotech IPO - A Thread
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Price brand 423-425 , lot size 35. Fresh issue will get 50 cr rest OFS of 446 cr
Listing date: Based on the indicative timeline, trading is likely to commence on July 23.
Pre-IPO placements: Rossari Biotech on Friday said it has raised Rs 149 crore from anchor investors. like ADIA, HDFC MF, Axis MF, ICICI Pru MF, SBI MF, Goldman Sachs India etc.
Promoter background: VJTI and UDCT Engineering, MBA Welingkar. Self-made first gen. Expert in Chemicals. After the share sale, the total promoter shareholding will fall to 73% from 95%.
Business Model: Application development & formulations, ingredients. Home care 48%, textile 43%, animal nutrition 9%. B2B company. Rossari, which also has presence in 17 countries including Vietnam, Bangladesh and Mauritius offered 2030 different products across categories.
The company has two R&D facilities – one within
the Silvassa manufacturing facility and the second in Mumbai (IIT).
Home- Personal care and performance chemicals segments. It has competition from MNCs like Merck, BASF and Wacher AG & domestic players such as Aarti, Galaxy, Atul
In the textile specialty, chemicals space, competition comes from players such as Archroma, CHT Croda International and Huntsman Corporation.
Cargill India, Zydus AH, Bayer Animal Health and Boehringer Ingelheim Animal Health are some of its competitors in the animal nutrition.
Some marquee Clients: Home care : HUL Lifebuoy, Vim, Comfort, IFB, Bosch, Panasonic and Domex . Textile chemicals: Arvind, Raymond.
Key Financials:
Revenue 600 cr. EBITDA margin 17.5% and PAT M- 10.9%
Debt to Equity : 0.23 FY 20 . MCAP Approximately 2250 Cr.
Revenue 41.65 per cent over FY18-20, EBITDA during the same period was up 56.58% annually and PAT expanded 60.27% over the same period.
Rossari reported a return on net worth of 31.79 per cent for FY20, 43.32% for FY19 and 34.08% FY18.
ROCE 24.79% for FY20, 50.93% for FY19 and 34.68% for FY18.
Post IPO will be debt free. 140 Cr cash FD. Zero working cap from bank, completely operating on own. IPO proceed usage: Debt pay of Rs 65 crore, to fund its working capital
requirements worth Rs 50 crore and towards general corporate purposes
Change that triggered growth: in 2012-13, Company entered in home care, forming JB with Germany based BUZIL.
Growth Triggers Ahead:
Dahej plant to be started from July 20 and fully operational by end of MARCH 21. No further CAPEX reqd for next 3 years. Plant at silvassa with 125k MTPa. Dahej will be 132,500 MTPA.
The company says the facility will enjoy a proximity to the deep-water, multi-cargo port of Dahej which is a cost and logistical advantage.
Distributors: India 204 and 29 abroad.
Textile specialty chemicals is approximately USD 1.2 billion. Global green chemicals market is expected to grow at a CAGR of 10.5% during 2019 to 2023. Animal pet care can have high growth.
Risks: Delay in new plant & utilisation, COVID effects, any downturn in textile industry.
As chemical sector continues to do well there is a possibility of listing gains. Also if things plan out as management said, it can produce better returns in future as well.
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