Vadodara-Based Shiva Pharmachem Submits Draft Red Herring Prospectus for INR 900 Crore IPO

Vadodara-based Shiva Pharmachem, a distinguished entity renowned for its prominence in the production of acid and alkyl chlorides, both by volume and stature, during the calendar year 2022 within the confines of India, and bearing a pivotal role on the global stage, has taken a decisive stride in its journey. This notable enterprise, fortified by a remarkable legacy of more than two decades of unwavering commitment to the realm of Indian specialty chemicals, has formally lodged its Draft Red Herring Prospectus (DRHP) with the esteemed regulatory body, the Securities and Exchange Board of India (Sebi). This strategic move by Shiva Pharmachem, emblematic of its unwavering dedication to elevating its operational horizons, serves as the foundation for garnering funds through its impending Initial Public Offering (IPO).

Rs 900 Crore Offer for Sale (OFS) IPO with Face Value of Rs 2 Each Announced

A noteworthy development has emerged in the financial landscape as Vadodara-based Shiva Pharmachem divulges its intention to embark on an Initial Public Offering (IPO) characterized by a face value of Rs 2 each. This significant undertaking is exclusively structured as an Offer for Sale (OFS) mechanism, envisaging a potential mobilization of up to Rs 900 crore. This initiative is orchestrated by the Promoter and Promoter Group Selling Shareholders, underscoring their strategic intent to divest a portion of their equity holdings to discerning investors.

Breakdown of Offer for Sale (OFS) Components: Promoters and Private Entity Divestiture

The intricacies of Vadodara-based Shiva Pharmachem’s impending Initial Public Offering (IPO) take on a multi-faceted hue with the delineation of the Offer for Sale (OFS) components. This IPO, with its distinct face value of Rs 2 per share, assumes a pivotal dimension as the divestiture mechanism is orchestrated through a stratified allocation. The OFS structure involves a cumulative potential mobilization of up to Rs 900 crore, with specific contributions from key entities.

Vishal Rakesh Agrawal’s Contribution:

Vishal Rakesh Agrawal, a significant figure in Shiva Pharmachem’s foundational landscape, emerges as a critical participant in the IPO’s OFS formulation. He contemplates a prospective divestment of equity shares, potentially amassing up to Rs 383 crore. This strategic divestiture, reflective of his prudent approach to value realization, contributes to the overall corpus aimed to be generated through the IPO.

Rahul Rakesh Agrawal’s Stake in the Divestiture:

Rahul Rakesh Agrawal, another integral actor in Shiva Pharmachem’s growth narrative, mirrors Vishal Rakesh Agrawal’s stance by proactively engaging in the OFS framework. His proposed divestment aligns with the overarching IPO strategy, with an envisioned potential realization of up to Rs 383 crore. This resolute action underscores his commitment to both personal financial objectives and the broader dynamics shaping the company’s trajectory.

Participation of Geetganga Investment Private Limited:

The mosaic of the IPO’s OFS configuration is further enriched by the presence of Geetganga Investment Private Limited. This private entity, a distinct entity in the strategic landscape, is poised to contribute significantly to the OFS realization. The prospective divestment, projected to amass up to Rs 134 crore, substantiates the collective intent to leverage the IPO mechanism for value extraction and financial diversification.

IPO Allocation Framework: Book Building Process Governs Distribution

The contours of Vadodara-based Shiva Pharmachem’s impending Initial Public Offering (IPO) are meticulously outlined through the prism of the Book Building Process, a sophisticated approach that empowers the allocation of shares within defined parameters. This IPO, distinguished by its nominal face value of Rs 2 per share, is strategically channeled through a multi-tiered allocation mechanism, catering to diverse investor segments.

Qualified Institutional Buyers (QIB) Allocation: Up to 50%

Shiva Pharmachem’s IPO unfolds its narrative by reserving a discernible portion of the offer, not exceeding 50%, for distribution amongst Qualified Institutional Buyers (QIBs). This strategically designed segment includes entities recognized for their professional investment acumen, such as mutual funds, insurance companies, pension funds, and foreign institutional investors. Their participation is calibrated through a proportionate basis, which harmonizes the alignment between their investment capacity and the IPO’s cumulative value.

Non-Institutional Bidders Allocation: Not Less Than 15%

Enriching the IPO’s allocation landscape, a substantive 15% of the offer is earmarked for Non-Institutional Bidders. This segment encompasses individual investors who, while not conforming to the institutional category, nonetheless wield a notable financial capacity to participate. This segment, characterized by high-net-worth individuals and corporate bodies, is allocated shares that amplify the inclusivity of the IPO distribution process.

Retail Individual Bidders Allocation: Not Less Than 35%

A significant component of Shiva Pharmachem’s IPO, amounting to a minimum of 35%, is set aside for Retail Individual Bidders. This segment epitomizes the broad spectrum of individual investors who participate in the IPO with a personal interest in the company’s growth trajectory. The expansive reach of this category underscores the IPO’s democratic essence, aligning with the aspiration to foster widespread ownership and engagement.

Shiva Pharmachem: Pioneering Leadership and Two Decades of Industry Mastery

Under the stewardship of its visionary founders, Mr. Rakesh Agrawal (Non-Executive Chairman), Mr. Vishal Agrawal (Managing Director), and Mr. Rahul Agrawal (Non-Executive Director), Shiva Pharmachem has etched a remarkable journey that spans over two decades in the chemical industry. Established in 1999, this illustrious entity has achieved a commanding presence by virtue of its strategic acumen and unwavering commitment to excellence.

Diverse Evolution: Shiva Pharmachem’s Journey in Chlorine Chemistry and Complex Synthesis

Shiva Pharmachem embarked on its operational odyssey with a distinctive focus on chlorine chemistry, anchoring its expertise around the intricate realm of chlorination. The company’s inception was underscored by a specialized competency in effecting the chlorination of acids and alcohols employing the strategic medium of thionyl chloride. Over time, the organization’s horizons expanded, its capabilities evolved, and its portfolio grew more intricate, encompassing advanced intermediates and multi-step processes characterized by 4 to 5 sequential stages.

Financial Performance of Shiva Pharmachem: Fiscal Year 2023 Highlights

Shiva Pharmachem’s financial trajectory for the fiscal year 2023 is underscored by notable achievements in both revenue and profitability. The company’s consolidated revenue from operations experienced a substantial growth of 6.25%, escalating to Rs 1,079.47 crore from the previous year’s figure of Rs 1,015.99 crore. This commendable uptick is primarily attributed to an increase in revenue stemming from product sales, signifying the company’s adeptness in driving revenue streams.

Profitability Surge:

The fiscal year 2023 witnessed a remarkable surge in net profit for Shiva Pharmachem. A noteworthy escalation of 40% is discernible, with the net profit soaring from Rs 83.32 crore in fiscal year 2022 to a formidable Rs 116.65 crore in fiscal year 2023. This robust growth in profitability is emblematic of the company’s effective operational strategies, adept cost management, and market-driven initiatives.

Eminent Financial Partners and Listing Venues for Shiva Pharmachem’s IPO

The orchestrations of Vadodara-based Shiva Pharmachem’s impending Initial Public Offering (IPO) are bolstered by a distinguished constellation of financial entities and strategic listing platforms. These prominent players collectively embody the seamless facilitation of the IPO process, assuring investor engagement and streamlined market access.

Book Running Lead Managers: JM Financial Limited and Kotak Mahindra Capital Company Limited

The robust management of the IPO’s proceedings is entrusted to two stalwart institutions: JM Financial Limited and Kotak Mahindra Capital Company Limited. These revered entities assume the pivotal role of Book Running Lead Managers (BRLMs), overseeing the orchestration of the IPO’s offering. Their astute guidance and comprehensive market understanding are poised to channel the IPO towards successful fruition, fostering investor engagement and optimizing market visibility.

Registrar to the Offer: Link Intime India Private Limited

The intricate administrative aspects of the IPO are entrusted to Link Intime India Private Limited. As the Registrar to the Offer, this proficient entity is tasked with the meticulous management of the IPO’s share allocation, facilitating the seamless execution of allotment and ensuring a robust communication framework with investors.

Listing Avenues: BSE and NSE

Shiva Pharmachem’s IPO endeavors culminate in the strategic pursuit of listing its equity shares on two esteemed stock exchanges – the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). These revered listing platforms are poised to bestow the company’s shares with comprehensive market visibility, enhanced liquidity, and a dynamic ecosystem for investor engagement.