Chemplast Sanmar IPO to open on Aug 10; price band fixed at Rs 530-541

The company aims to raise Rs 3,850 crore through the IPO, which will include Rs 1,300 crore fresh issue and offer for sale up to Rs 2,550 crore by promoters

Chennai-based Chemplast Sanmar, a speciality chemical manufacturer with focus on paste PVC resin, will launch its initial public offering (IPO) on August 10 at a price band of Rs 530-541 per equity share.

The company is targeting to raise around Rs 3,850 crore through the IPO, which will include Rs 1,300 crore fresh issue and offer for sale up to Rs 2,550 crore by promoters Sanmar Holdings and Sanmar Engineering Services, who own 100 per cent of the company at present.

Chemplast is planning to use the IPO proceeds for early redemption of non-convertible debentures (NCDs) of about Rs 1,238.5 crore and for meeting general corporate purposes. The company's aim is to have only a marginal debt post-IPO.

The IPO market lot size is 27 equity shares, while retail-individual investors can apply for up to 13 lots. The issue will close on August 12 for subscription. About 75 percent of the total offer is reserved for qualified institutional buyers (QIBs), while 15 per cent will be for non-institutional investors (NIIs) and 10 per cent for retail investors.

Chemplast Sanmar had acquired Chemplast Cuddalore Vinyls, India’s largest manufacturer of suspension PVC resin, during the last financial year. ICICI Securities, Axis Capital, Credit Suisse Securities (India), IIFL Securities, Ambit Private, BOB Capital Markets and HDFC Bank are the global co-ordinators and book running lead managers to the offer. IndusInd Bank and YES Securities (India) are also the book running lead managers to the offer.

Fairfax India Holdings Corporation (Fairfax), led by billionaire Prem Watsa, has invested in Sanmar Holdings Limited (SHL) Chemicals Group since 2016. Chemplast Sanmar has plans to expand its existing capacity by 35,000 tonnes in a brownfield plant at Cuddalore at an investment of around Rs 256 crore.