About the Company:
Aether Industries Ltd is a speciality chemical manufacturer in India focused on producing advanced intermediates and speciality chemicals involving complex and differentiated chemistry and technology core competencies.
Company’s business was started in 2013 with a vision to create a niche in the global chemical industry with a creative approach towards chemistry, technology and systems that would lead to sustainable growth.
Company is one of the fastest growing specialty chemical companies in India, growing at a CAGR of nearly 49.5% between Fiscal 2019 and Fiscal 2021.
Company has eight chemistry competencies to use for our wide array of products, which enables us to cater to niche and advanced intermediate requirements of a wider range of end-products and applications.
Company has developed, and continue to develop, advanced intermediates and speciality chemicals products having applications in the pharmaceutical, agrochemicals, material science, coatings, high performance photography, additives and oil & gas segments of the chemicals industry.
As of March 31, 2022, company’s product portfolio comprised over 25 products and in CY2020, company were the sole manufacturer in India of 4MEP, MMBC, T2E, OTBN, NODG, DVL and Bifenthrin Alcohol.
4MEP, T2E, MMBC, NODG, BFA, OTBN and DVL were 100% imported into India from China four years ago and company is now selling these products to Chinese customers.
Company has one of the largest pilot plants in the world with 106 reactors installed, for both batch as well as continuous reaction technology.
Company’s Business verticals:
- large scale manufacturing of our own intermediates and speciality chemicals.
- contract research and manufacturing services (“CRAMS”)
- contract/exclusive manufacturing.
Note: Company is among the few Indian specialty chemical companies to have successfully launched these three separate business models in just 5 years into commercial manufacturing.
Revenue from various segments:
Company exports products to 18 countries, including Italy, Spain, Germany, the United States and other parts of the world.
Company’s revenue from exports (including deemed exports) have grown at CAGR of 58.56% from Rs.100 crores in Fiscal 2019 to Rs.251.6 crores in Fiscal 2021.
The revenue from exports (including deemed exports) was Rs.280.4 crores in the nine months ended December 31, 2021.
As of March 31, 2022, company’s product portfolio comprised over 25 products which were marketed to 34 global customers in 18 countries and to 154 domestic customers.
Company’s revenue from operations in the nine months ended December 31, 2021 and Fiscal 2021, 57.32% were from India, 32.74%, were from EU countries, 5.95% were from the North America (United States and Mexico), 3.49% were from Asia and 0.50% from the rest of the world.
In the year in 2020, Aether Industries Ltd were the:
- biggest manufacturer of 4MEP globally in terms of production volume and the only manufacturer of this product in India.
- largest manufacturer of HEEP in India and globally in terms of production volume.
- largest manufacturer of NODG globally in terms of production volume and the only manufacturer of this product in India.
- biggest manufacturer of T2E globally in terms of production volume and the only manufacturer of this product in India.
Key justifications for holding levels:
- Mr. Ashwin Jayantilal Desai (Designation: Managing Director)
- Mrs. Purnima Ashwin Desai (Designation: Whole-time Director)
Objectives of the Issue:
Offer for Sale: (Rs.181 cr)
- Each of the Selling Shareholders will be entitled to the proceeds of the Offer for Sale. Company will not receive any proceeds from the Offer for Sale.
Fresh Issue: (Rs.627 cr)
- Prepayment or repayment of all or a portion of certain outstanding borrowings availed by the Company.
- Funding capital expenditure requirements for our manufacturing facility (“Proposed Greenfield Project”).
- Funding working capital requirements of the Company.
- General corporate purposes.
Funding capital expenditure requirements for Proposed Greenfield Project.
Company aims to continue investing in expanding the manufacturing capacities to meet increasing demands for company’s products, along with the necessity to launch new products for various applications.
The total estimated cost for the Proposed Greenfield Project is Rs.190 crores.
Positives for the Company:
Sole manufacturer in India for 7 products.
- The Company is the largest manufacturer in the world in CY 2020 for four products (4MEP, T2E, NODG, HEEP) and sole manufacturer in India for 7 products (4MEP, T2E, OTBN, NODG, DVL, BFA, MMBC). All the above products were historically imported from China into India.
Company has eight chemistry competencies to use for its wide array of products.
- Chemical companies usually have a single or a couple of chemistry competencies for their entire product portfolio.
- However, the Company has eight chemistry competencies to use for its wide array of products, which enables company to cater to niche and advanced intermediate requirements of a wider range of end-products and applications.
Company has deployed continuous reaction technology as a core technology competency at all stages.
- The Company is one of the few companies in the specialty chemicals sector who has deployed continuous reaction technology as a core technology competency at all stages (R&D, Pilot Plant and large scale manufacturing).
- Based on the technical expertise that the Company has developed over the years, the Company is able to carry out innovative processes at global scale, which is difficult to replicate, and creates significant barriers for new entrants.
- Company has one of the largest pilot plants in the world with 106 reactors installed, for both batch as well as continuous reaction technology.
Robust pipeline of products which are planned to be launched in Fiscal 2022-23.
- Company has built a robust pipeline of products which are planned to be launched in Fiscal 2022-23 – (i) Dolutegravir (Antiretroviral to treat HIV/AIDS) (ii) Carbamazepine (Anti-epileptic) (iii) Oxcarbazepine (Anticonvulsant) (iv) Memantine (treats symptoms of Alzheimer’s) (v) Ambroxol (treatment of respiratory disease)
Company has advantage over new entrants.
- The Company’s customers include over 160 multinational, global, regional and local companies.
- Customer engagements are dependent on delivering quality products consistently. Its potential customers may require considerable amounts of time to approve the Company as suppliers to ensure that all their quality controls are met and that the Company meet all their requirements across a variety of jurisdictions and multiple regulators.
- Due to the resources involved in engaging with new suppliers, customers are less inclined to pursue alternate supply sources.
Financials of the Company:
|(in Crores)||FY 19||FY 20||FY 21||31st Dec 21|
Valuation of Peer Group Companies:
|Company Name||Face Value||EPS||PE Ratio||RoNW||NAV|
|Aether Industries Ltd||10||7.36||87.22||40.79%||15.69|
|Clean Science and Technology Ltd||1||18.68||100.08||36.74%||50.84|
|Fine Organic Industries Ltd||5||39.25||112.10||16.45%||238.55|
|Issue Opens on||24th May 2022|
|Issue Closes on:.||26th May 2022|
|Issue Price||Rs.610 – 642|
|Retail Category Allocation||35%|
|Minimum Lot||23 shares|
|Issue Size||Rs.808 cr ($104 million)|
|Market Cap||Rs.7991 cr ($1.03 billion)|
|Listing at||NSE & BSE|
|Equity Shares Offered (Fresh)||97,66,355 (Rs.627 cr)|
|Equity Shares Offered (OFS)||28,20,000 (Rs.181 cr)|
|Total Equity Shares Offered (Fresh + OFS)||1,25,86,355|
|Equity Shares Prior to the issue||11,47,16,318|
|Equity Shares after the issue||12,44,82,673|
|Finalization of Basis of Allotment||on or Before 31st May 2022|
|Initiation of Refunds||on or Before 1st June 2022|
|Credit of Equity Shares:||on or Before 2nd June 2022|
|Listing Date:||on or Before 3rd June 2022|
IPO Valuation Parameters:
|Earnings Per Share (EPS)||Price To Earnings ratio (PE)||Return on Net Worth (RoNW)||Net Asset Value (NAV)|
|Check IPO Allotment Status:|
Link InTime : https://linkintime.co.in/PublicIssue/
BSE IPO Website: https://www.bseindia.com/IPO/Allotment
|Company Contact Info:|
|Aether Industries Ltd
Plot No. 8203,
Surat – 394230,
Tel: +91 261 660 3360
|IPO Registrar Info:|
|LINK INTIME INDIA PRIVATE LIMITED
C 101, 1st Floor, 247 Park
Vikhroli (West), Mumbai 400 083
Telephone: +91 22 4918 6200