21 Feb , 2022 By : Kanchan Joshi
Specialty chemical manufacturer Archean Chemical Industries has filed its Draft Red Herring Prospectus (DRHP) with market regulator Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO).
The initial share sale consists of a fresh issue of equity shares aggregating up to Rs1,000 crore and an offer for sale of up to 1.9 crore shares by the promoter and investors, including the India Resurgence Fund, a joint venture between the Piramal Group and Bain Capital.
The company plans to use the proceeds of the fresh issue for the redemption of non-convertible debentures (NCDs) issued by it. “This will reduce its outstanding indebtedness, debt servicing costs, improve the debt to equity ratio and enable utilisation of our internal accruals for further investment in our business growth and expansion," it said in its draft IPO papers.
Archean Chemical Industries is a leading manufacturer of specialty marine chemicals in India, and is focused on producing and exporting bromine, industrial salt, and sulphate of potash to customers around the world. It produces its products from its brine reserves in the Rann of Kutch, located on the coast of Gujarat, and manufactures products at its facility near Hajipir in Gujarat.
The bromine produced by Archean is used as key initial level material, which has applications in pharma, agrochemicals, water treatment, flame retardant, additives, oil & gas and energy storage segments. As of September 30, 2021, the Company marketed its products to 13 global customers in 13 countries, and to 29 domestic customers, as per its DRHP.
Industrial salt is an important raw material used in the chemical industry for the production of various other chemicals and compounds and sulphate of potash is used as a fertilizer and also has medical uses.
IIFL Securities, ICICI Securities and JM Financial are the book running lead managers to the IPO.
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