Shiva Pharmachem files DRHP for Rs 900 cr IPO

Vadodara-based Shiva Pharmachem, a manufacturer of acid and alkyl chlorides, has filed its Draft Red Herring prospectus (DRHP) with capital market regulator SEBI to raise funds through for its initial public offering (IPO).

The IPO with a face value of Rs 2 each is entirely an offer for sale (OFS) of up to Rs 900 crore by Promoter and Promoter Group Selling Shareholders.

The offer for sale comprises up to Rs 383 crore by Vishal Rakesh Agrawal, up to Rs 383 crore by Rahul Rakesh Agrawal, and up to Rs 134 crore by Geetganga Investment.

The Offer is being made through the Book Building Process, wherein not more than 50 per cent of the Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers, not less than 15 per cent of the Offer shall be available for allocation to Non-Institutional Bidders and not less than 35 per cent of the Offer shall be available for allocation to Retail Individual Bidders.

Led by its founders Rakesh Agrawal (Non-Executive Chairman), Vishal Agrawal (Managing Director), and Rahul Agrawal (Non-Executive Director), Shiva Pharmachem established its business in 1999 and has over twenty years of experience in the chemical industry. A company statement informs that as at FY23, it serves over 181 multinational and domestic companies across 22 countries. Its prominent markets include Germany, the US, Switzerland, Italy and Mexico.

The company commenced its operations centered around chlorine chemistry, particularly specialising in the chlorination of acids and alcohols using thionyl chloride. Gradually, the company expanded its capabilities to encompass intricate chemistry involving advanced intermediates and multi-step processes. Its manufacturing facilities are located in Luna (Gujarat), Dahej SEZ (Gujarat), and Sajóbábony (Hungary).

Its product lines include aliphatic and aromatic chlorides, aliphatic and aromatic nitriles, alkoxy ketones, herbicide safeners, thiocarbamates, chloroformates, and isocyanates.

Over 80 per cent of its revenue from operations in FY 23 originated from Fortune 500 companies worldwide.

Reportedly, for the fiscal year 2023, the consolidated revenue from operations increased 6.25 per cent to Rs 1,079.47 crore against Rs 1,015.99 crore a year ago, primarily attributed to increase in revenue from sales of products. Net profit increased by 40 per cent from Rs 83.32 crore in fiscal 2022 to Rs 116.65 crore in fiscal 2023.

JM Financial, and Kotak Mahindra Capital Company are the book running lead managers and Link Intime India is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.