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 IPO consists of a fresh issue of Rs. 1,000 crore and an offer-for-sale of up to 19.07 million shares by its existing shareholders and promoters.

 

The OFS will comprise up to 5.30 million shares by Chemikas Speciality LLP (CS LLP), up to 3.73 million shares by India Resurgence Fund Scheme I (IRF I), up to 6.30 million shares by India Resurgence Fund, Scheme II (IRF II) and up to 3.73 million shares by Piramal Natural Resources Pvt Ltd (PNRPL).

 

CS LLP holds 41 percent stake in the company. IRF I has 7.46 percent stake, IFR II has 12.19 percent, PNRPL has 7.46 percent stake in the firm.

 

The proceeds from the Rs 800-crore issue will be used to redeem non convertible debentures fully or partly. As of December 2021, the amount outstanding under the borrowing arrangements entered by the firm was Rs 840 crore and interest accrued but not due was Rs 116.67 crore.

 

"We believe the redemption of the NCDs will reduce our outstanding indebtedness, deb servicing costs, improve our debt to equity ratio and enable utilisation of our internal accruals for further investment in our business growth and expansion. Additionally we believe that the increased leverage capacity of our company will improve our ability to raise further resources in the future to fund our potential business development opportunities and plans to grow and expand our business," as per draft red herring prospectus (DRHP) filed with SEBI.

 

The firm is a leading specialty marine chemical manufacturer in India and focused on producing and exporting bromine, industrial salt, and sulphate of potash to customers around the world.

 

The firm makes products from brine reserves in the Rann of Kutch, located on the coasts of Gujarat, at a facility near Hajipir in the state. As of September 2021, it marketed products to 13 global customers in 13 countries and to 29 domestic customers.