Mumbai: Canadian billionaire Prem Watsa-backed Chemplast Sanmar has appointed at least three investment bankers —, Axis Capital and IIFL Securities — to help raise about Rs 3,000-3,500 crore through a combination of the initial public offer and offer for sale.
The company, which was delisted about a decade ago, is now coming back to the stock market and will likely file the draft Red herring Prospectus (DRHP) next one week. It is seeking a valuation of Rs 10,000 crore, said people with knowledge of the matter.
“The plan for share sale has been pending for a long time,” said one of the persons cited above.
Chemplast did not respond to queries. Individual banks could not be contacted immediately.
Chennai-based Sanmar deals in chemicals, shipping and engineering. Chemplast Sanmar — fifty years old and the flagship company of The Sanmar Group — is a major manufacturer of PVC resins, caustic soda, fluorochemicals, refrigerant gas and industrial salt. The manufacturing facilities are located at Mettur, Berigai, Panruti and Vedaranyam in Tamil Nadu and Karaikal in the Union Territory of Puducherry.
India Ratings graded the company with A- with a stable outlook.
“Demand for PVC products in India remains robust, driven by the government’s continued focus on growth in the irrigation sector, affordable housing and infrastructure projects,” India Ratings said in a report last year.
During FY20, the company reported a revenue of Rs 1,259.31 crore, marginally higher than the revenue of Rs 1,252.69 crore reported a year ago, according to a note by Brickworks Ratings. Profit fell to Rs 98.74 crore during the fiscal, from Rs 187.21 crore.
Nearly one and a half years ago, Fairfax India Holdings Corporation had completed an equity infusion into the Sanmar Chemicals Group, taking its equity holding in the group to about 43 per cent.
So far in 2021, 17 companies have raised nearly Rs 17,500 crore from IPOs. Although the majority of them have done well in the secondary market, some of the recent ones such as Suryoday Small Finance Bank, Kalyan Jewellers Craftsman Automation, Brookfield India have disappointed investors and are currently trading below their issue prices.