Prasol Chemicals Limited IPO

Last Updated on October 12, 2023 by BFSLTeam BFSLTeam

Prasol Chemicals Limited is India’s leading forward-integrated manufacturer of phosphorus and acetone derivatives. The company aims to become a popular global brand for producing and supplying specialty chemicals. Its products are used in agrochemical industries and pharmaceuticals and for disinfectants, flavours, sunscreens and shampoos.

This company has received its green signal from SEBI to launch an IPO soon. It proposes to raise an amount equal to Rs. 25,000 million by offering a fresh issue of shares as stated in the DRHP of Prasol Chemicals Ltd. IPO. 

Want to know more? We have covered all the necessary details available about the upcoming IPO of Prasol Chemicals you will want to know.

About the Company

As per a CRISIL Report, Prasol Chemicals Ltd. is one of the prominent integrated manufacturers of acetone and phosphorus derivatives. These products act as raw materials for industries in four primary business segments. These are home and personal care, agrochemicals, pharmaceuticals and performance chemicals.

Since its incorporation as a small-scale manufacturer, the company expanded its business to become a significant multi-speciality chemical manufacturing industry of today. Its global distribution network comprises 45 countries in Asia, Europe and North America. It has received a Two Star Export House Company certification from the Government of India.

According to its DRHP, Prasol Chemicals Limited has manufactured more than 75 specialty products till December 31, 2021. The company also has 32 products in the pipeline awaiting to be launched. 

To adapt to changing consumer patterns,  this company places immense focus on R&D and keeps adding new products to its portfolio. With the assistance of a dedicated and professional R&D team, the company successfully monitors changing market trends. 

As an old player in the chemical industry market, Prasol Chemicals Ltd. holds long-term business relationships with several clients. Some of the big names associated with its customer base are Alembic Pharmaceuticals Limited, Indoco Remedies Limited, Bharat Rasayan Limited, Bayer CropScience Limited, Arkema and Coromandel International Limited.

Talking of financial metrics, the total income of Prasol Chemicals Ltd. was Rs. 4,988.74 million in FY 2019. This grew to become 6,021.36 million in FY 2021. Furthermore, this company’s profit after tax grew from Rs. 237.2 million in FY 2019 to Rs. 250.84 million in FY 2021.  

IPO Details and Objectives

Prasol Chemicals Limited submitted its preliminary papers to SEBI on April 13, 2022. The company in its DRHP proposes to raise Rs. 250 crore by offering a fresh issue of equity shares. Prasol Chemicals Ltd. is also planning to issue 90,00,000 equity shares as Offer for Sale or OFS.

The selling shareholders offering OFS shares are Usha Rajnikant Shah, Dipti Nalin Parikh, Gaurang Natwarlal Parikh, Nishith Rasiklal Dhariya, Sachin Jatin Parikh, Chamak Jatin Parikh, Sandhya Nishith Shah and Bhisham Kumar Gupta. No proceeds from this OFS will go to the company.

Prasol Chemicals Ltd. IPO has received a green signal from SEBI and the company plans to go ahead with this plan. As per recent updates, the company has announced that it may consider a pre-IPO placement amounting to Rs. 50 crore. If this happens, its fresh issue size will be reduced. Along with its Book Running Lead Managers, it has announced the face value as Rs. 2 for each equity share. 

Prasol Chemicals Limited is planning to use the net proceeds from its upcoming IPO to repay or prepay some of its debts in partial or full. The company also aims to fund capital requirements and general corporate purposes. 

Strengths

The points below highlight the strengths of this company that makes Prasol Chemicals Ltd. IPO worth investing in. 

• In the global market, Prasol Chemicals Limited is able to compete with established players like Solvay, SI Group and ALTIVIA. 
• This company holds a long-term relationship with most of its customer base. 
• Prasol Chemicals Ltd. holds a strong global presence. The company’s revenue from exports grew from Rs. 1,245 million in FY 2019 to Rs. 1,387.20 million in FY 2021. 
• Prasol Chemicals Limited is run and managed by a team of experienced promoters and a senior management team.
• This company also focuses on long-term sustainability through various environmentally friendly initiatives 

Also Read: IPO investment strategy

Risks Involved

Besides the above strengths, here are some risks that can cause hindrances in the business and operation of Prasol Chemicals Ltd. Some of these are:

• The outbreak of a pandemic like COVID-19 or other health issues can adversely impact the manufacturing company’s business, operations and financial conditions. The consequences of such emergencies can be unpredictable and uncertain. 
• Prasol Chemicals Limited’s business and demand highly rely on its client’s end product and their customers’ feedback. Any decline in the demand can adversely impact its business and financial condition. 

Summary 

Prasol Chemical Limited manufactures chemicals that act as raw materials for medicines, paints, shampoos and other consumer goods. To invest in the upcoming Prasol Chemicals Limited IPO, you must read its DRHP thoroughly. This shall help you analyse whether the company’s plan with its net proceeds aligns with your investment goals. If yes, you can start planning your investment strategy.

You can also explore our website to learn the ways to invest in the Prasol Chemicals Ltd. IPO after its launch. Furthermore, you can also open a Demat and trading account with us and start your investment journey.

Also Read: Benefits of Investing in IPO

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