Specialty chemicals manufacturers Hemani Industries Limited (Hemani) has filed its Draft Red Herring Prospectus (DRHP) with Securities and Exchange Board of India (SEBI) to raise Rs 2,000 crore through an Initial Public Offering (IPO).

The IPO consists of a fresh issue of equity shares aggregating up to Rs. 500 crore and an Offer for Sale (OFS) aggregating up to Rs. 1,500 crore.

According to the DRHP, OFS comprises offloading of up to Rs 500 crore worth of shares each by Jayesh Mohan Dama, Mohan Sunderji Dama and Minal Mohan Dama.

The company will use the net proceeds worth Rs 129.71 crore for funding the capital expenditure requirement for the capacity expansion at Saykha industrial estate for manufacturing of benzaldehyde (BCHO), benzyl alcohol (BOH) and benzyl chloride (BCL) and Rs 48.34 crore for repayment or pre-payment of certain borrowings.

The company proposes to construct three plants for manufacturing (i) 500 TPM BCHO; (ii) 500 TPM BOH; and (iii) 650 TPM BCL. For the Proposed Expansion, we require investment in inter alia construction of building and civil works and plant and machinery.

Besides, Rs 93.87 crore will be utilised for investment and repayment or prepayment of certain borrowings in its wholly-owned subsidiary HCCPL and Rs 150 crore for funding the company's long term working capital requirement. The proceeds will also be used for general corporate purposes.

JM Financial Limited and Kotak Mahindra Capital Company Limited are the Book Running Lead Managers to the IPO.

Hemani is present across the entire value chain – Technicals, Formulations and Intermediates. According to Frost & Sullivan, was is a leading player in the Indian pyrethroid market in Fiscal 2021. In CY2020, it was also the largest global producer by volume of Meta Phenoxy Benzaldehyde (MPBD) and the second largest producer by volume of Cypermethrin Acid Chloride (“CMAC”).

It holds leadership position in Technicals as well – in CY2020, it was the largest global producer by volume of Cypermethrin Technical, the second largest global producer by volume of Alpha Cypermethrin, the third largest global producer by volume of Permethrin Technical and the third largest manufacturer by volume of Dicamba in India. (Source: Frost & Sullivan).

The ompany is predominantly focused on exports, with presence in high-growth regions such as Asia Pacific, Latin America, the United States, Russia, Africa and Australia. The Company derives 60-70% of its revenue from exports.

Hemani has catered to over 1,700 customers in the last 10 years. Some of its marquee clients include Alchemie Overseas, Arysta LifeScience Benelux, Bayer Vapi, Dhanuka Agritech, Jiangsu Yangnong Chemical, Shandong Rainbow Agrosciences and UPL Limited. The Company has a track record of customer retention. Out of its 1,700+ total customers over the past ten years, it has enjoyed business relationships for more than five years with 31% of these customers.