Chemplast Sanmar IPO: Opens today; Key Details investors should know

The initial public offering (IPO) of the specialty chemicals manufacturer Chemplast Sanmar Ltd will open for subscription today, i.e., on Tuesday, August 10, 2021. The issue closes on Thursday, August 12, 2021.

The price band for the offer has been fixed at Rs 530-542 per equity share and the retail investors can bid for a minimum of 27 equity shares and in multiples of 27 equity shares thereafter. A single lot of the IPO is worth Rs 14,607 at the upper range of the price band. Retail investors can bid for a maximum of 13 lots.

A 75 per cent portion of the net issue is reserved for qualified institutional buyers (QIBs), whereas a 15 per cent stake will be allotted to non-institutional investors (NIIs). Only 10 per cent of the offer will be reserved for retail investors.

The company has plans to raise up to Rs 3,850 crore from the primary market. The issue comprises fresh issuance of shares, aggregating up to Rs 1,300 crore, and an offer for sale of up to Rs 2,550 crore by promoters and existing shareholders. Promoters Sanmar Holdings (SHL) and Sanmar Engineering Services (SESL) will offload equity shares worth Rs 2,463.44 crore and Rs 86.56 crore respectively, in the offer for sale.

The net proceeds from the fresh issue will be utilised for early redemption of non-convertible debentures worth Rs 1,238.25 crore and general corporate purposes, whereas proceeds from the offer for sale will go to the existing shareholders.

It is not the first time when Chemplast Sanmar is raising money from the primary market. It stocks of the specialty manufacturer was delisted nearly a decade from the stock exchanges in June 2012.

Besides, the specialty chemicals manufacturer on Monday, August 9, 2021, has garnered Rs 1,732.5 crore from anchor investors ahead of its IPO opening by allocating 3.20 crore equity shares to the anchor investors at Rs 541 per share. Few of the anchor investors who participated in the anchor book were Abu Dhabi Investment Authority, Amundi Funds, Government Pension Fund Global, Best Investment, Corporation, Jupiter India Fund, Neptune Investment, Kuber India Fund, CLSA, Public Sector Pension Investment Board, Segantii India Mauritius, SBI Mutual Fund, Axis Mutual Fund, Mirae Asset, ICICI Prudential, HDFC Life Insurance, HDFC Trustee, Nippon Life, Franklin India, Aditya Birla Sun Life, Sundaram Mutual Fund, IDFC, JM Financial, IIFL Special Opportunities Fund, and Edelweiss among others.

Chemplast Sanmar Ltd (CSL) is the largest manufacturer of specialty paste PVC (polyvinyl chloride) resin in India on the basis of installed production capacity, as of December 2020. It is also the third-largest manufacturer of caustic soda, and the largest manufacturer of hydrogen peroxide in South India. It holds a leadership position in the chemicals industry with high barriers to Entry.