Rossari Biotech, a specialty industrial chemical manufacturer, readies itself to launch Rs 500 crore worth of fresh IPO equities. It is the first in the last four months since SBI Card & Payment announced IPO launch on March 5, before nationwide lockdown commenced in the wake of COVID-19 outbreak in the country. The IPO will be a combination of fresh shares along with 1.05 crore equity in offer-for-sale by the promoters, Edward Menezes and Sunil Chari.
A brief background on Rossari Biotech
Rossari Biotech Ltd. is a specialist manufacturer of textile chemicals. According to F&S report, Rossari was the largest producer of textile specialty chemicals in India in 2019. The company operates in eighteen countries, including India, Bangladesh, Vietnam, and Mauritius. To this date, Rossari produces over 1,948 types of specialty chemicals in the categories of textile specialty chemicals, animal and poultry feed, home and personal care, and performance chemicals.
The company has its product development and R&D facility centres located in Silvassa and Mumbai and production units in Silvassa, Dadra & Nagar Haveli and an upcoming one in Dahej in Gujarat.
Through IPO, the company is aiming at raising public funds from the market that will assist in its debt repayment and increase working capital capacity.
Impact on Indian equity market
Confirmation needs to come from the company regarding the news along with the floor price of the IPO. But the market is looking forward to it after the lull of almost four months. Many companies have dropped or shelved IPO launch events even after receiving a green signal from SEBI in the wake of the COVID-19. Also, the market took the beating as investors went on a hiatus and chose to play safe, pulling the market further down. Rossari Biotech IPO launch announcement might end the dry spell.
“Business has boomed for Rossari Biotech during the COVID-19 phase due to rising demand for disinfectants and sanitisers manufactured by the firm. Post the final approval from SEBI for revised documents with updated financials, the plan is to launch the IPO in a few weeks by mid or end July,” disclosed one source aware of the developments.
Rossari Biotech initial public offering launch is a combination of new shares and 1.05 crore of promoter’s offer-for-sales scrips. Offer-for-sales is a way for promoters to reduce their holding in the company by issuing shares from their stash. SEBI first introduced the method in 2012, and both state-owned and private sector companies can leverage offer-for-sale to reduce their percentage in company share. It is a more straightforward way to trade stocks publicly by the promoters.
According to a source, Rossari might offer its IPO at Rs 425 apiece, which will allow the company a market capitalisation of Rs 2,200 crore. It has already raised Rs 100 crore in a pre-IPO launch in March through a private placement route.
Rossari filed its draft paper with SEBI in December 2019 and received clearance in February 2020. Axis Capital and ICICI Securities are appointed as merchant banks by the company to facilitate the IPO launch event. The shares will be listed in NSE and BSE.
Rossari Biotech IPO launch news is undoubtedly big for the market under the current condition. IPOs are useful investment tools, creating a steady income for long-term investors. Even amid COVID-19 condition business of Rossari Biotech has flourished, which might interest investors to bid for its IPO scrips.