Fine Organics is coming up with an IPO. The company is based in Mumbai and incorporated in 2002. Fine Organics is a manufacturer of oleochemical-based additives. They are leading producers of specialty additives for foods, plastics, rubbers, paints, inks, cosmetics, coatings, textile auxiliaries, lubes and several other specialty applications. They have products facilities at Ambernath, Badlapur and Dombivli in Maharashtra. They are 64300 tonnes production capacity as per 2017 reports. They have over 500 full time employees on payroll. They have strong R&D capability and developed over 46 new products since 2014.
Fine Organic Industries, a chemicals firm has fixed a price band of Rs 780 to Rs 783 per equity share to raise around Rs 600 crore through an initial public offering (IPO). The offer for sale will see divestment of 25 per cent of stake of 76,64,994 equity shares by the existing shareholders. The issue will open on June 20 and closes on June 22. The 48-year old company held entirely by the promoters family had filed draft papers with markets regulator Sebi to float the IPO in February.
It has three manufacturing facilities in the suburbs of the megapolis, including Ambernath, Dombivli and Badlapur, with a total installed capacity of about 64,300 tonnes per annum (tpa). "The company has drawn up capital expenditure of Rs 270 crore to expand capacities over the next 2 years and has already invested Rs 70 crore towards equity portion," Fine Organics CFO and director Tushar Shah told reporters at the IPO roadshow here.
The company is expanding its Ambernath facility by adding a capacity of 32,000 tpa at a cost of Rs 130 crore, and it plans to fund 30 per cent from equity and 70 per cent from debt, he said. It is also looking at investing Rs 55 crore in setting up Fine Zeelandia facility in Mumbai in association with Dutch family-owned Zeelandia International, a part of the Royal Zeelandia group, he said.
The company clocked net revenue of Rs 581 crore for the nine-months period ended December 2018. It has launched 387 products and exports accounts for 65 per cent of the total revenue, Shah added. Meanwhile, as part of the global expansion plans, it is also setting up a joint venture firm named FineAdd with the German partner Adcotec, to own and operate a 10,000 tpa facility in in Leipzig, Germany, which will be operational by Q3 FY20, according to the offer document. Fine Organic will own 50 per cent and Adcotec will own the other 50 per cent, it added.
Highlights of the Company:
a. Consistent market leadership position in the Indian mutual fund industry;
b. Trusted brand and strong parentage;
c. Strong investment performance supported by comprehensive investment philosophy and risk management;
d. Superior and diversified product mix distributed through a multi-channel distribution network;
e. Focus on individual customers and customer centric approach;
f. Consistent profitable growth; and
g. Experienced and stable management and investment teams.
b. Trusted brand and strong parentage;
c. Strong investment performance supported by comprehensive investment philosophy and risk management;
d. Superior and diversified product mix distributed through a multi-channel distribution network;
e. Focus on individual customers and customer centric approach;
f. Consistent profitable growth; and
g. Experienced and stable management and investment teams.
Main object of the issue is:
The objects of the Offer for the Company are to achieve the benefit of listing the Equity Shares on the Stock Exchanges and for the sale of Equity Shares by the Promoter Selling Shareholder. Further, the Company expects that the listing of Equity Shares will enhance its visibility and brand image and provide liquidity to its existing shareholders.
The objects of the Offer for the Company are to achieve the benefit of listing the Equity Shares on the Stock Exchanges and for the sale of Equity Shares by the Promoter Selling Shareholder. Further, the Company expects that the listing of Equity Shares will enhance its visibility and brand image and provide liquidity to its existing shareholders.
Positives For the Company:
Largest Producer of Oleochemical-based Additives in India.
Company is the largest manufacturer of oleochemical-based additives in India and one of the few large players in global oleochemical-based additives industry.They are one of six global players in the food additives industry and one of five global players in the plastic additives industry.Company has a huge first-mover advantage in India, alongside various other competitive advantages over other global players. This gives Company an advantage in pricing products competitively and allows them to provide stiff competition to new players. Hence, no major domestic or global player has set up a manufacturing facility in India.
Specialised Business Model with High Entry Barriers.
There are multiple entry barriers for a new entrant in the global oleochemical-based additives industry, such as product formulations, process technology and customer stickiness to established players. As a result, they are one of the few large global players in this industry.Because of high Entry barriers, Company is able to obtain higher EBITDA and profit margins for their products compared to other manufacturing industries where barriers to entry are lower.Company’s EBITDA margins were 18.54%, 22.11%, 18.43% and 17.78% for Fiscals 2015, 2016, 2017 and the nine months ended December 31, 2017, respectively.
Diversified Customer Base with Long Term Relationships with Marquee Customers.
Company has 603 direct customers and 127 distributors (who sold than more than 5,000 customers). Company’s direct customers are multinational, regional and local players manufacturing consumer products, such as Hindustan Unilever and Parle Products, and petrochemical companies and polymer producers globally.Company has an extensive distribution network in India and worldwide, enabling their products to be sold in 67 countries.
Diversified Product Portfolio Catering to a Variety of High Growth Industries.
As at December 31, 2017, they had a range of 387 products sold under the ‘Fine Organics’ brand, used in the (a) plastic industry and (b) food industry and others (cosmetics, printing inks, coated papers, lube additives, wires and cables, coatings and other specialty applications) industries.
IPO Particulars:
IPO Opens on : 20 June 2018
IPO Closes on : 22 June 2018
Issue Type: Book Built Issue IPO
Issue Size: 7,664,994 Equity Shares of Rs 5 aggregating up to Rs [.] Cr
Face Value: INR 5 per share
Price Band: INR 780-783 Per Equity Share
Minimum Order Quantity: 19 shares
Listing will at: BSE,NSE
Shares offered to
Anchor – 22,99,497 Shares = 180.05Crore
QIB – 15,32,999 Shares = 120.03Crore
NII – 11,49,750 Shares = 90.03 Crore
RII – 26,82,748 Shares = 210.06Crore (Lot size: 19 = 1,41,197 Forms)
Total Issue – 76,64,994 Equity Shares = 600.17 Crore
IPO Closes on : 22 June 2018
Issue Type: Book Built Issue IPO
Issue Size: 7,664,994 Equity Shares of Rs 5 aggregating up to Rs [.] Cr
Face Value: INR 5 per share
Price Band: INR 780-783 Per Equity Share
Minimum Order Quantity: 19 shares
Listing will at: BSE,NSE
Shares offered to
Anchor – 22,99,497 Shares = 180.05Crore
QIB – 15,32,999 Shares = 120.03Crore
NII – 11,49,750 Shares = 90.03 Crore
RII – 26,82,748 Shares = 210.06Crore (Lot size: 19 = 1,41,197 Forms)
Total Issue – 76,64,994 Equity Shares = 600.17 Crore
Financials: Consolidated Figures
EPS for 2016-17 : INR25.56
EPS for 9M of 2017-18 INR 26.38
PE Ratio on EPS of 2016-17 : 30.63
RONW for 2016-17 : 24.65%
RONW for 2017-18 9M : 17.34 %
NAV as on 31.12.2017 :INR 114.65
Upper PBV : 6.83
EPS for 9M of 2017-18 INR 26.38
PE Ratio on EPS of 2016-17 : 30.63
RONW for 2016-17 : 24.65%
RONW for 2017-18 9M : 17.34 %
NAV as on 31.12.2017 :INR 114.65
Upper PBV : 6.83
Fine Organics Financial:
| Rs. in Crore | |||||
| Revenue | Expense | PAT | |||
| 2013 | 497.5 | 466.6 | 20.9 | ||
| 2014 | 574.2 | 479.6 | 61.7 | ||
| 2015 | 616.5 | 530.9 | 57.1 | ||
| 2016 | 667.7 | 550.8 | 76.2 | ||
| 2017 | 792.7 | 671.8 | 77.7 | ||
| 2018 (9M) | 594.7 | 500.2 | 58.5 | ||
- Prakash Damodar Kamat
- Mukesh Maganlal Shah
- Jyotsna Ramesh Shah
- Jayen Ramesh Shah
- Tushar Ramesh Shah
- Bimal Mukesh Shah
Peer Company Comparison :Galaxy Surfactants :
Face Value : INR 10
Price : Rs. 1299 on 13 June 18
Total Income : INR 2171.70 Crore
PE : 34.7x
NAV :INR 161.51
P/NAV: 8.05
Face Value : INR 10
Price : Rs. 1299 on 13 June 18
Total Income : INR 2171.70 Crore
PE : 34.7x
NAV :INR 161.51
P/NAV: 8.05
Fine Organics IPO Market Lot:
- Shares: Apply for 19 Shares (Minimum Lot Size)
- Amount: Rs.14,877
Fine Organics IPO Allotment & Listing:
- Basis of Allotment: 28-June-2018
- Refunds: 29-June-2018
- Credit to demat accounts: 02-July-2018
- Listing: 03-July-2018
Tentative timeTable:
13 June 18– Price Band announced
19 June 18 – Anchor List
27 June 18– Finalisation of Basis of Allotment
28 June 18– Unblocking of ASBA
29 June 18– Credit to Demat Accounts
2 July 18– Listing on NSE & BSE
Fine Organics IPO Lead Managers:13 June 18– Price Band announced
19 June 18 – Anchor List
27 June 18– Finalisation of Basis of Allotment
28 June 18– Unblocking of ASBA
29 June 18– Credit to Demat Accounts
2 July 18– Listing on NSE & BSE
- Edelweiss Capital Limited
- JM Financial Consultants Private Limited
Fine House,
Anandji Lane
Ghatkopar (East), Mumbai 400 077
Phone: (91 22) 2102 5000
Fax: (91 22) 2102 8899
Email: investors@fineorganics.com
Website: http://www.fineorganics.com
Fine Organics IPO Review:
- Apply for Short Term and Long Term.
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