Fine Organic promoters to part-exit in IPO, bag up to Rs 800cr

Promoters of Fine Organic Industries, a chemicals firm, is planning to divest 25 per cent stake to raise around Rs 700-800 crore through initial public offering (IPO), a merchant banking source said.

The offer for sale will see divestment of up to 7,664,994 equity shares by the existing shareholders, according to the draft prospectus filed with the Securities and Exchange Board of India (Sebi).

"The Shah family and other promoters of the company are selling 25 per cent holding in the firm to raise around Rs 700-800 crore in the soon-to-be-launched IPO later this month," the source said.

The 48-year old company held entirely by the promoters family had filed draft papers with markets regulator Sebi to float the IPO in February.

It has three manufacturing facilities in the suburbs of the megapolis, including Ambernath, Dombivli and Badlapur, with a total installed capacity of about 64,300 tonnes per annum (tpa).

The company is expanding its Ambernath facility by adding capacity of 32,000 tpa at a cost of Rs 130 crore, which we plan to fund 30 per cent from equity and 70 per cent from debt, as per the prospectus.

It is also looking at investing Rs 55 crore in setting up Fine Zeelandia facility in Mumbai in association with Dutch family-owned Zeelandia International, a part of the Royal Zeelandia group, it said.

Meanwhile, as part of the global expansion plans, it is also setting up a joint venture firm named FineAdd with the German partner Adcotec, to own and operate a 10,000 tpa facility in in Leipzig, Germany, which will be operational by Q3 FY20, according to the document.

Fine Organic will own 50 per cent and Adcotec will own the other 50 per cent, it added.