Specialty marine chemical maker Archean Chemical Industries has received market regulator Sebi nod for its initial share sale.
The IPO consists of a fresh issue of equity shares aggregating up to ₹1,000 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, according to the draft red herring prospectus (DRHP).
The company is expected to raise anywhere between ₹2,000 crore and ₹2,200 crore through the initial share-sale.
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.
Archean 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.
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.
Archean’s revenue from operations has grown at a CAGR (compound annual growth rate) of 9.42% from ₹565.5 crore in fiscal 2019 to ₹740.76 crore in fiscal 2021.
IIFL Securities, ICICI Securities and JM Financial are the book running lead managers to the IPO.