About the Company:
Laxmi Organic Industries is a leading manufacturer of Acetyl Intermediates and Specialty Intermediates with almost three decades of experience in large scale manufacturing of chemicals.
Company’s products are currently divided into two broad categories, namely the Acetyl Intermediates and the Specialty Intermediates.
Company is currently among the largest manufacturers of ethyl acetate in India with a market share of approximately 30% of the Indian ethyl acetate market.
Company is the only manufacturer of diketene derivatives in India with a market share of approximately 55 % of the Indian diketene derivatives market in terms of revenue in Fiscal 2020 and one of the largest portfolios of diketene products
Company’s Business Segments:
Industries in which Company’s Products are Used:
Which Industries Uses Company’s Products?
Laxmi Organic Industries products find application in various high-growth industries, including pharmaceuticals, agrochemicals, dyes & pigments, inks & coatings, paints, printing & packaging, flavours & fragrances, adhesives and other industrial applications.
Company’s Entry into specialty fluorochemicals Business:
Laxmi Organic Industries also propose to diversify into manufacturing of specialty fluorochemicals and have recently acquired assets including plant & machinery, design and operating paperwork, REACH registrations and patents of Miteni, a manufacturer of organic fluorospecialties and electrochemical fluorination.
Company believes that it is well placed to enter into the high margin specialty fluorochemicals space through this acquisition.
Because of company’s expertise in the Acetyl Intermediates and the Specialty Intermediates segments, the entry into the fluorochemicals space will put Laxmi Organic Industries at a differentiated position from other chemicals manufacturers.
Company’s Global Footprint:
Over the years, company has significantly expanded the scale of operations and global footprint with customers in over 30 countries including China, Netherlands, Russia, Singapore, United Arab Emirates, United Kingdom and United States of America.
Laxmi Organic Industries also has offices in Leiden (Netherlands), Shanghai (China) and Sharjah (United Arab Emirates) which enables the company to assess international demand and increase customer outreach thereby bolstering product development initiatives.
Geography-wise break-up of Company’s revenues:
Company’s Key Customers:
Company has established long-standing relationships with marquee players including:
- Syngenta Asia Pacific Pte. Ltd.
- Alembic Pharmaceuticals Ltd
- Dr. Reddy’s Laboratories Ltd
- Granules India Ltd
- Hetero Labs Ltd
- Laurus Labs Limited,
- Macleods Pharmaceuticals Private Ltd
- Mylan Laboratories Ltd
- Neuland Laboratories Ltd
- Suven Pharmaceuticals Ltd
- UPL Limited.
Percentage of revenue from sale of manufactured products and services:
Company’s storage of raw materials:
Company has arrangements with third parties for usage of storage tanks in inter alia Mumbai for storage of raw materials and finished goods and Rotterdam (Netherlands), Antwerp (Belgium) and Genoa (Italy) for storage of finished products which enables company to deliver the products on short notice.
Company is Largest exporter of ethyl acetate from India:
Laxmi Organic Industries has been the largest exporter of ethyl acetate from India in the six months ended September 30, 2020 and Fiscals 2020, 2019 and 2018 and one of the largest exporters of ethyl acetate to Europe from India since 2012.
For the six months ended September 30, 2020 and the Fiscals 2020, 2019 and 2018, Company’s revenue from exports of manufactured products contributed 23.17%, 24.24%, 27.80% and 22.18%, respectively, of revenue from operations on a standalone basis.
Company’s Manufacturing Facilities:
Company currently has two manufacturing facilities in Mahad, Maharashtra with one facility dedicated to Acetyl Intermediates (AI Facility) and another dedicated to Specialty Intermediates (SI facility), which are strategically located in proximity to several ports and each other.
Company’s Proposed Facility:
Company in the process of setting up a manufacturing facility at Lote Parshuram, Maharashtra for manufacturing fluorospecialty chemicals (the “Proposed Facility”)
Company’s Installed production capacity:
As at September 30, 2020, the aggregate installed production capacity at the AI Manufacturing Facility was 161,320 MTPA, while the aggregate installed production capacity at the SI Manufacturing Facility was 78,045 MTPA.
Company is also in the process of acquiring YCPL, having an aggregate installed production capacity of 10,500 MTPA of acetaldehyde and 29,200 MTPA of ethyl acetate as on September 30, 2020.
India Acetyl market Share:
Management Team:
- Mr. Ravi Goenka (Chairman and Managing Director)
- Mr. Satej Nabar (Executive Director and Chief Executive Officer)
Objectives of the Issue:
Offer for Sale: (Rs. 300 cr)
- The proceeds of the Offer for Sale shall be received by the Promoter Selling Shareholder. Our Company will not receive any proceeds from the Offer for Sale.
Fresh Issue: (Rs. 300 cr)
- Investment in our wholly owned Subsidiary, Yellowstone Fine Chemicals Pvt Ltd (“YFCPL”) for part-financing its capital expenditure requirements in relation to the setting up of a manufacturing facility for fluorospecialty chemicals (“Proposed Facility”).
- Investment in YFCPL for funding its working capital requirements.
- Funding capital expenditure requirements for expansion of our SI Manufacturing Facility (“Proposed Expansion”).
- Funding working capital requirements of the Company.
- Purchase of plant and machinery for augmenting infrastructure development at our SI Manufacturing Facility.
- Prepayment or repayment of all or a portion of certain outstanding borrowings availed by our Company and our wholly owned Subsidiary, Viva Lifesciences Pvt Ltd (“VLPL”)
- General corporate purposes.
Positives for the Company:
Leading manufacturer of ethyl acetate with significant market share.
- Company is currently among the largest manufacturers of ethyl acetate in India with a market share of approximately 30% of the Indian ethyl acetate market.
- Company has been the largest exporter of ethyl acetate from India in the six months ended September 30, 2020 and Fiscals 2020, 2019 and 2018, which amounted to slightly less than half of the total ethyl acetate exports from the country.
- Company is also one of the largest exporters of ethyl acetate to Europe from India since 2012 and have a long-standing presence in Europe with approximately two decades of experience in the sales of ethyl acetate in Europe and is the only Indian company engaged in the sale of ethyl acetate with a direct presence in Europe currently.
Only Indian manufacturer of diketene derivatives with a significant market share and one of the largest portfolios of diketene products.
- The diketene market in India was valued at USD 150-170 million and is expected to reach ~USD 200 million by 2024, with about 40% of this demand being met by imports.
- Only few companies worldwide hold the technology to cater to a complete range of diketene derivatives.
- Traditionally, India fulfilled most of its diketene demand from imports which were mainly from Europe or from China.
- Over the last decade,Laxmi Organic Industries being the only manufacturer of diketene derivatives, have rapidly gained domestic market share and held a market share of approximately 55 % of the Indian diketene derivatives market in terms of revenue in Fiscal 2020.
- The increasing demand in pharmaceuticals and agrochemicals from developing economies like India is likely to increase the consumption of diketene and its derivatives, where Company has a very strong presence.
Diversified customer base across high growth industries and long-standing relationships with marquee customers.
- Company has established long-standing relationships with marquee customers across various industries. Some of the long-term customers in the pharmaceutical segment include Alembic Pharmaceuticals Ltd, Dr. Reddy’s Laboratories Ltd, Hetero Labs Ltd, Laurus Labs Ltd etc
Strategically located manufacturing facilities, vertical integration and supply chain efficiencies.
- Company’s AI (Acetyl Intermediates) Manufacturing Facility is the single largest ethyl acetate manufacturing site in India, in terms of capacity.
- Further, Company’s Manufacturing Facilities are located close to the southern and western regions of India, where some of the major pharmaceutical manufacturers are located.
Global presence and low geographical concentration.
- In addition to India, company has customers in over 30 countries including China, Netherlands, Russia, Singapore, United Arab Emirates, United Kingdom and United States of America.
Expansion by Acquiring YCPL (Yellowstone Chemicals Private Ltd)
- Company is in the process of expanding the manufacturing capabilities for the Acetyl Intermediates by acquiring AHPL (Acetyls Holding Private Ltd), which through its wholly owned subsidiary, YCPL is engaged in the manufacturing of acetaldehyde and ethyl acetate.
- The aggregate installed production capacity at the YCPL Facility as on September 30, 2020 is 10,500 MTPA of acetaldehyde and 29,200 MTPA of ethyl acetate.
- Further, as a single site risk mitigation initiative, company is in the process of identifying one or more sites for the future growth of business beyond the currently committed expansion initiatives.
- Post completion of the YCPL Acquisition, company believes that the market share in the ethyl acetate market will be further enhanced.
Entry into the fluorospecialty chemicals Business:
- Company is in the process of setting up the Proposed Facility in Lote Parshuram, Maharashtra for manufacturing fluorospecialty chemicals which is proposed to commence operations by the fourth quarter of Fiscal 2022.
Financials of the Company:
| (in Crores) | FY 18 | FY 19 | FY 20 | 30th Sept 20 |
|---|---|---|---|---|
| Revenue | 1396.0 | 1574.3 | 1538.6 | 814.3 |
| Net Profit | 75.6 | 72.3 | 70.2 | 45.4 |
Valuation of Peer Group Companies:
| Company Name | Face Value | EPS | PE Ratio | RoNW | NAV |
|---|---|---|---|---|---|
| Laxmi Organic Industries | 2 | 2.86 | 45.45 | 16.45% | 18.97 |
| Aarti Industries Ltd | 5 | 30.77 | 24.92 | 18.00% | 170.96 |
| Atul Limited | 10 | 224.69 | 17.75 | 21.12% | 1063.63 |
| Navin Flourine International | 2 | 82.53 | 14.68 | 28.42% | 285.46 |
| Fine Organic Industries | 5 | 53.75 | 35.46 | 26.63% | 201.86 |
| Rossari Biotech Ltd | 2 | 13.23 | – | 7.88% | 56.49 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 15th March 2021 |
| Issue Closes on:. | 17th March 2021 |
| Issue Price | Rs.129 – 130 |
| Face Value | Rs.2 |
| Retail Category Allocation | 35% |
| Minimum Lot | 115 shares |
| Minimum Investment | Rs.14950 |
| Issue Constitutes | 17.5% |
| Issue Size | Rs. 600 cr ($81 million) |
| Market Cap | Rs. 3427 cr ($463 million) |
| Listing at | NSE & BSE |
| Equity Shares Offered (Fresh) | 2,30,76,923 |
| Equity Shares Offered (OFS) | 2,30,76,923 |
| Total Equity Shares Offered (Fresh + OFS) | 4,61,53,846 |
| Equity Shares Prior | 24,05,85,850 |
| Equity Shares after the issue | 26,36,62,773 |
Also Read : List of Upcoming IPO’s in India.
Important Dates:
| Finalization of Basis of Allotment | On or Before 22nd March 2021 |
| Initiation of Refunds | On or Before 23rd March 2021 |
| Credit of Equity Shares: | On or Before 24th March 2021 |
| Listing Date: | On or Before 25th March 2021 |
Subscription Details: (Will be Updated)
| (Subscription-Category-Wise (no. of times) Till time : 05:00 PM) | Shares Offered | 15th March | 16th March | 17th March |
|---|---|---|---|---|
| QIB | 93,02,324 | 0.01 | 1.15 | 175.43 |
| NII | 69,76,744 | 0.49 | 2.48 | 217.62 |
| Retail | 1,62,79,070 | 4.34 | 10.39 | 19.97 |
| Employee | —– | —– | —– | — |
| TOTAL | 3,25,58,138 | 2.28 | 6.05 | 106.74 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 2.86 | 45.45 | 16.45% | 18.97 |
| Check IPO Allotment Status: |
|---|
Link InTime Website https://linkintime.co.in/PublicIssue/BSE IPO Website: https://www.bseindia.com/IPO/Allotment |
| Company Contact Info: |
|---|
| Laxmi Organic Industries Ltd A-22/2/3, MIDC, Mahad, Raigad– 402 309; Tel: +91-2145-232424 Corporate Office: Chandermukhi Building, 2nd and 3rd Floor, Nariman Point, Mumbai – 400021 Tel: +91-22-49104444 E-mail: investors@laxmi.com; Website: www.laxmi.com |
| IPO Registrar Info: |
|---|
| Link Intime India Private Limited C101, 247 Park L.B.S. Marg, Vikhroli (West) Mumbai – 400 083 Tel: +91 22 4918 6200 Email: laxmiorganic.ipo@linkintime.co.in Website: www.linkintime.co.in |
