Balaji Speciality Chemicals is all set to embark on its IPO journey, with the IPO scheduled to open on [Insert Opening Date] and concluding on [Insert Closing Date]. This exciting IPO aims to raise approximately ₹425 crores, with a mix of fresh issue worth ₹250 crores and an offer for sale of up to 2,60,00,000 equity shares, each priced at ₹2.
For investors, here’s the breakdown of the allocation: Retail investors have a 10% quota, while Qualified Institutional Buyers (QIBs) have a lion’s share of 75%, and High Net Worth Individuals (HNIs) have a 15% allocation.
About Balaji Speciality Chemicals
Balaji Speciality Chemicals Limited is gearing up to launch its IPO, signaling an exciting opportunity for investors. The company specializes in the manufacturing of various chemicals, including ethylamine, methylamines, and specialty chemical derivatives, along with pharmaceutical excipients.
Established in 2010, Balaji Speciality Chemicals has made a significant mark in the industry. Their product portfolio includes chemicals like Ethylenediamine, Piperazine (Anhydrous), Diethylenetriamine, Amino Ethyl Ethanol Amines, and Amino Ethyl Piperazine. These chemicals are produced using the Monoethanol Amine (“MEA”) process and serve as valuable domestic alternatives to imported substances. They cater to a wide range of industries, including specialty chemicals, agrochemicals, and pharmaceuticals, contributing to India’s self-reliance in critical chemical sectors. Their primary manufacturing facility is located in Solapur, Maharashtra, serving as the heart of their production operations.
With a diverse clientele consisting of 182 customers, Balaji Speciality Chemicals has built a robust reputation. Their client base includes manufacturers of specialty chemicals, agrochemicals, pharmaceuticals, as well as distributors who play a crucial role in further distributing these products within these industries. Some noteworthy clients in their portfolio include Nanjing Union Chemical Company Limited, Korea India Limited, UPL Limited, Dr. Reddy’s Laboratories Limited, and Aarti Drugs Limited.
Balaji Speciality Chemicals operates as a subsidiary of Balaji Amines Limited (“BAL”), a renowned name in the Indian aliphatic amines manufacturing sector. This IPO is poised to be a significant event for both the company and potential investors, offering a chance to be part of a dynamic and innovative player in the chemical industry. Keep an eye out for further details, including the IPO’s price band and lot size, as this promising opportunity unfolds.
The primary objectives of this IPO are as follows:
Repayment/Pre-payment of Outstanding Borrowings: One of the key purposes of this IPO is to use the funds raised to repay or pre-pay certain outstanding borrowings that the company has availed. This move can help reduce the financial burden and interest costs, ultimately strengthening the company’s financial position.
Funding Working Capital Requirements: Another important use of the IPO proceeds is to provide capital for fulfilling the working capital requirements of the company. Adequate working capital is essential for day-to-day operations, and having sufficient funds in this regard can support the company’s growth and stability.
General Corporate Purposes: The IPO funds will also be utilized for general corporate purposes. This is a broad category that may encompass various needs and opportunities that arise in the normal course of business. It could include investments in research and development, expansion plans, strategic initiatives, or any other corporate activities that can enhance the company’s overall performance and competitiveness.
In summary, the objectives of the IPO are centered around improving the company’s financial health by reducing debt, ensuring adequate working capital, and supporting its overall growth and corporate initiatives.
Balaji Speciality Chemicals IPO Date & Price Band Details
Please note that the values in square brackets “[.]” represent placeholders for the actual figures, which would be determined closer to the IPO launch date.
Balaji Speciality Chemicals Company Financial Report
Particulars (in Rs. Crores)
FY22
FY21
FY20
Revenue
514.28
174.40
53.88
EBITDA
180.62
43.83
0.43
PAT
108.94
10.39
-15.87
Particulars (in Rs. Crores)
FY22
FY21
FY20
Total Assets
401.61
303.04
304.24
Share Capital
40.00
40.00
40.00
Total Liabilities
214.13
224.51
236.11
Balaji Chemicals IPO’s strengths and risks
Strengths
Risks
1. The company is the sole producer of specialized chemicals within India, for compounds like Ethylenediamine, Piperazine (Anhydrous), Diethylenetriamine, Amino Ethyl Ethanol Amines, and Amino Ethyl Piperazine.
1. No long-term contracts with customers or suppliers.
2. Well-positioned in the industry.
2. Limited operating history with a loss reported in the past.
3. There is no effective substitute for the company’s products in the end-use industries.
3. Any restrictions on imported materials or increases in shipping costs can affect its profitability.
4. National and global client portfolio.
4. The company’s share of selling Ethylenediamine is at 67%, thus, any change in its demand can impact its bottom line.
5. Capacity to utilize research and development proficiency along with strategic direction provided by Balaji Amines Limited.
5. Subject to strict regulations by the government.
6. Improvement in market share and profitability.
Peer Group
Clean Science and Technology Limited
Alkyl Amines Chemicals Limited
Tatva Chintan Pharma Chem Limited
Neogen Chemicals Limited
Company Promoters
BALAJI AMINES LIMITED
ANDE PRATHAP REDDY
ANDE SRINIVAS REDDY
RAM REDDY DUNDURAPU
RAJESHWAR REDDY NOMULA
GADDAM HEMANTH REDDY
Balaji Speciality Chemicals IPO Lead Managers aka Merchant Bankers
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