Fine Organics IPO Review, Should You Invest in the Upcoming IPO?

Fine Organics Industries, which is a 48 years chemical company, has planned to raise INR 600 crore through an initial public offering (IPO). The Fine Organics IPO will lead to the divestment of 25 per cent of stake of 76,64,994 equity shares by the existing shareholders.

Fine Organics IPO book running lead managers to the offer are JM Financial Limited and Edelweiss Financial Services Limited, while Karvy Computershare Private Limited is the registrar to the offer.

Fine Organics IPO – Key Highlights

• As per CRISIL Research Report, the company is the largest manufacturer of oleochemical-based additives in India and a strong player globally in this industry. Fine Organics is one of the few large Players in the Oleochemical based Additives Industry in the World
• Fine Organics has planned the capital expenditure of Rs 270 crore to expand the capacities over the next 2 years and for this already has invested Rs 70 crore towards equity portion
• The company has planned the addition of a capacity of 32,000 tpa as it is expanding its Ambernath facility at a cost of Rs 130 crore. The company will fund this expansion through 30 per cent from equity and 70 per cent from debt
• In association with Dutch family-owned Zeelandia International, which is a part of the Royal Zeelandia group, the company will be setting up Fine Zeelandia facility in Mumbai. For this the company has planned investment of Rs 55 crore.
• Further, the company will form a 50:50 joint venture firm named FineAdd with the German partner Adcotec, to own and operate a 10,000 tpa facility in in Leipzig, Germany. This facility is expected to be operational by the third quarter FY20 and is a part of the company’s global expansion plans.
• The company is also the largest producer of slip additives in the world.
• The company has strategically located their production facilities with in-house development capabilities
• The company has strong R&D capability as it has developed and launched 46 new products since 2014

Purpose of the IPO

The objects of the IPO is to achieve the benefits of listing their Equity Shares on the Stock Exchanges. The listing of Equity Shares is expected to enhance the company’s brand name and provide liquidity to the existing shareholders.

Other IPO Detail

• Issue Open: Jun 20, 2018 – Jun 22, 2018
• Issue Type: Book Built Issue IPO
• Issue Price: INR 780 – INR 783 Per Equity Share
• Issue Size: 7,664,994 Equity Shares of face value Rs 5 aggregating up to INR 600.17 Cr
• Market Lot: 19 Shares
• Minimum Order Quantity: 19 Shares
• Listing At: NSE, BSE
• Commencement of trading of the Equity Shares: On or about Jun 22, 2018

Should you Subscribe?

Fine Organics in 2017 has reported the profit of 79.5 crore compared to 77 crore in 2016. The company has posted growth year on year as there is demand for the company’s products. For the nine-months period ended December 2017, the company has posted the net revenue of Rs 581 crore. In FY 17, the company had posted revenue of Rs. 818.1 crores. The investors may subscribe to the upcoming Fine Organics IPO.

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