Hemani Industries Ltd IPO

The Mumbai-based chemical company, Hemani Industries Ltd has filed its draft papers with SEBI with the proposal to raise Rs. 2,000 crore via an IPO in its offer document. Kotak Mahindra Capital Ltd and JM Financial Ltd are the book-running lead managers of this public issue.

If you are interested about the Hemani Industries Ltd IPO, read on to learn more about its line of business, competitive strengths, risk factors and more.

About Hemani Industries Ltd

Hemani Industries Ltd is involved with the business of manufacturing and marketing a wide variety of specialty chemicals and agrochemicals. The end-user applications of these products include wood protection products, crop protection products such as fungicides and insecticides, public or household health products and more.

Some products manufactured by Hemani Industries include Meta Phenoxy Benzaldehyde, Alpha Cypermethrin, Cypermethrin, Deltamethrin and Metamitron. The company is one of the leading exporters of Meta Phenoxy Benzaldehyde in countries like China, the United Kingdom, etc. It has received a “Three Star Export House” certification from the Ministry of Commerce and Industry.

IPO Details and Objectives

Hemani Industries Ltd is preparing to open an initial public offering (IPO) and has filed a Draft Red Herring Prospectus (DRHP) for the same with SEBI. Its offer consists of an offer-for-sale and a fresh issue. While the OFS size is 1,500 crore, the size of its fresh issue is Rs. 500 crore. 

Three promoter shareholders are participating in the OFS. These shareholders are entitled to the proceeds from the offer-for-sale after paying out all applicable taxes and offer-related expenses. Hemani Industries will not be receiving any such proceeds from its OFS.

The objectives of the fresh issue proposed by this company are as follows:

• To make repayment of some outstanding debts of the company
• Fund its massive capital expenditures requirements for a proposed expansion plan
• For long-term working capital requirements
• To make certain investments in its subsidiary company “HCCPL” and to repay certain borrowings made by HCCPL
• To fund any expenses for various corporate purposes

Also Read: IPO investment strategy

Company Financials 

Here is the summary of essential financial details of Hemani Industries Ltd for FY 21, FY 20, FY 19.

Particulars	For the Financial Year Ending (Rs. Millions) Except EPS
	March 31, 2021	March 31, 2020	March 31, 2019
Total Assets	9,961.79	8,488.62	6,584.68
Total Liabilities	3,963.12	4,194.34	3,639.65
Total Expenses	9,155.30	8,345.23	7,639.87
Total Revenue	11,483.06	10,198.28	8,949.78
Profit/Loss After Tax	1,703.01	1,356.32	759.77
EBITDA	2,594.43	2,147.75	1,531.33
EPS (Basic and Diluted)	18.81	14.82	8.26

Strengths of Hemani Industries Ltd.

Here are some competitive strengths of Hemani Industries Ltd that you should know as an investor:

• Hemani Industries Ltd has an advanced positional advantage in the speciality chemical products industry. It is the largest manufacturer of Meta Phenoxy Benzaldehyde (MPBD) and the second-largest manufacturer of CMAC in the world, in terms of manufacturing volume.
• The company has a strong and well-established presence across the globe in more than 60 countries covering major geographies such as South America, North America, Europe, Asia and Australia.
• Moreover, it has maintained a massive customer base of over 1,700 multinational, regional and local companies across the globe for more than a decade.
• Hemani Industries is fully focused on nurturing consumer consumer-centric culture and adhering to quality and performance standards. It has also employed a strong and efficient research & development team.
• Over the past few years, it has shown robust financial performance, organically developed with consistent growth in revenues and profitability. For instance, its profit after tax (PAT) has grown at a CAGR of 49.33% from FY19 to FY21.

Risks Involved

Here are some risk factors associated with the business of Hemani Industries Ltd that you should be aware of:

• The entire business is based on manufacturing chemicals. Therefore, any adverse situation leading to a slowdown, shutdown of manufacturing facilities, worker strikes etc., could directly affect its operations and profitability.
• Chemical manufacturing and handling in India come with stringent regulations and laws. Therefore, any compliance failure can lead to imposition of huge penalties, licence cancellation or suspension, litigation etc., which can directly affect the company’s profitability.
• The company relies on a combination of trade secrets, trademarks, contractual restrictions and copyright laws to protect and secure its intellectual properties. Failure to protect any of these intellectual property rights can adversely affect its profitability and operations.

Summary of Hemani Industries Ltd

To summarise, Hemani Industries Ltd is among the leading agrochemicals and speciality chemical manufacturers in the country. It has already filed its DRHP with SEBI which is pending approval. 

If you want to start investing in this IPO, consider checking its strengths, financial performance, risk factors, IPO objectives, and line of business to make an informed decision. Also, keep an eye on our website for more updates on the Hemani Industries IPO.

Also Read: What are types of IPO?

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