Chemplast Sanmar stock gains after board OKs fundraise of up to Rs 1,000 cr

Chemplast Sanmar stock in focus: Chemplast Sanmar stock surged as much as 2.16 per cent to hit an intraday high of Rs 576 per share on Tuesday. 

However, the stock was off highs and was trading 0.51 per cent lower at Rs 560.95 per share, at 11:25 AM. By comparison, BSE Sensex was trading 0.25 per cent higher at 77,531.30 levels. 

The uptick in the share price came after the company announced that its board has approved raising of funds worth up to Rs 1,000 crore. 

In an exchange filing, Chemplast Sanmar said, “We wish to inform you that the Board of Directors of Chemplast Sanmar Limited has inter-alia approved raising of funds by way of further issue of Equity Shares, and/or any other securities convertible into equity shares (including warrants or otherwise) and/or any other eligible securities of the Company (“Securities”), for an aggregate sum not exceeding Rs. 1,000 Crores (Rupees one thousand Crores only) or an equivalent amount thereof (inclusive of such premium as may be fixed on such Securities) through preferential allotment or rights issue or private placement, including a Qualified Institutions Placement or any other permissible mode or combinations thereof as may be decided, pursuant to the provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 and other applicable laws and regulations and subject to approval of the shareholders and receipt of regulatory/statutory and other approvals as applicable.”

Chemplast Sanmar Ltd, formerly known as Chemicals & Plastics India (CPIL), was established in 1985 under the promotion of Urethanes India by Chemplast, the flagship of the Sanmar Group based in Tamil Nadu. By 1991, it became a wholly-owned subsidiary of Chemplast and adopted its current name. 

The company specialises in manufacturing specialty chemicals, focusing on specialty paste PVC resin and custom manufacturing of starting materials and intermediates for the pharmaceutical, agrochemical, and fine chemical sectors.

Chemplast Sanmar is the largest producer of specialty paste PVC resin in India and ranks as the third largest manufacturer of caustic soda. It also holds the distinction of being the largest manufacturer of hydrogen peroxide in South India and one of India's oldest producers of Chloromethanes. 

The company established a 2500 TPA Thermoplastic Polyurethane Plant in Tamil Nadu through technical collaboration with BF Goodrich Company, USA.

Additionally, Chemplast Sanmar manufactures a range of products including caustic soda, chlorine, chlorinated solvents, PVC, refrigerant gases, and industrial alcohol. In 1991-92, its PVC manufacturing capacity was expanded to 48,000 TPA, solidifying its position as the third largest PVC resin manufacturer in the country.

Financial performance

During Q4 FY24, Chemplast Sanmar posted a net loss of Rs. 31 crore as compared to net profit of Rs 46 crore in Q4 FY23. 

Revenue from operations in Q4 FY24, meanwhile, was Rs 1,051 crore as compared to Rs. 1,147 crore during the corresponding period in FY23. 

In Q4 FY24, EBITDA dropped 78 per cent to Rs 21 crore as compared to Rs. 97 crore.

The market capitalisation of the Chemplast Sanmar is Rs 8,880.22 crore, according to Bombay Stock Exchange (BSE).