Upcoming IPO: Gem Aromatics files draft papers with market regulator

Gem Aromatics IPO comprises a fresh issue of shares worth up to Rs 175 crore, and an offer for sale (OFS) of up to 89,24,274 equity shares, with a face value of Rs 2 apiece

Specialty ingredients manufacturer Gem Aromatics is all set to go public. The Mumbai-based company has announced that it has filed its draft red herring prospectus (DRHP) with the market regulator, Securities and Exchange Board of India (Sebi), to raise funds through an Initial Public Offering (IPO).   As per the DRHP, the IPO comprises a fresh issue of shares worth up to Rs 175 crore, and an offer for sale (OFS) of up to 89,24,274 equity shares, with a face value of Rs 2, by promoters and investor selling shareholders.

 

From the promoters' group, Vipul Parekh, Kaksha Vipul Parekh, and Yash Vipul Parekh will participate in the OFS. From the investors' group, dōTERRA Enterprises will sell its equity shares through the OFS.

 

The offer is being made through the book-building process, wherein not more than 50 per cent of the net offer is allocated to qualified institutional buyers (QIBs), and at least 15 per cent and 35 per cent of the net offer are allocated to non-institutional and retail individual investors, respectively.

 

"Each of the selling shareholders shall be entitled to their respective portion of the proceeds of the offer for sale after deducting its portion of the offer-related expenses and relevant taxes thereon. Our company will not receive any proceeds from the offer for sale, and accordingly, the proceeds from the offer for sale will not form a part of the net proceeds," the company stated in its DRHP.

 

However, Gem Aromatics intends to utilise the proceeds from the fresh issue for prepayment and/or repayment, in full or in part, of certain outstanding borrowings availed by the company and its subsidiary, Krystal Ingredients. Additionally, the company will use the proceeds for general corporate purposes.

 

KFin Technologies is the registrar to the issue, while Motilal Oswal Investment Advisors is the sole book-running lead manager for the IPO.

 

The equity shares are proposed to be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE).

 

Gem Aromatics is a manufacturer of specialty ingredients in India, including essential oils, aroma chemicals, and value-added derivatives, with over two decades of experience. Its roots in the industry date back to 1915, providing a foundation to capitalise on the growing market demand, according to a Frost & Sullivan (F&S) report mentioned in the DRHP. The company offers 70 products across four categories: mint and mint derivatives, clove and clove derivatives, phenol, and other synthetic and natural ingredients.