The major player in India’s agrochemical and speciality chemical space, Safex Chemicals (India) has filed its DRHP with the Securities and Exchange Board of India (SEBI). With its presence across branded formulations, speciality chemicals and contract development and manufacturing organisation (CDMO) segments, Safex Chemicals IPO is well positioned in the rapidly growing Indian and global agrochemical ecosystem.
Safex Chemicals IPO Details
Safex Chemicals IPO comprises a fresh issue of up to INR 450 crore and an OFS of up to 35.73 million equity shares. Key promoter shareholders, including Surinder Kumar Chaudhary, Rajesh Kumar Jindal, Neeraj Kumar Jindal and Piyush Jindal, along with investor entities such as Sarcoline (ChrysCapital), Anchor Partners and Sage Investment Trust, will be selling part of their holdings through the OFS. ChrysCapital-backed Sarcoline is the largest shareholder with 42.20% of pre-offer equity.
The book running lead managers (BRLMs) to the issue are Axis Capital, JM Financial and SBI Capital Markets, with KFin Technologies as the registrar.
Business Model: Diversified and Synergistic
Safex Chemicals has a multi-vertical model across:
- Branded Formulations – Offers 140+ products (insecticides, herbicides, fungicides, fertilisers and PGRs) through three flagship brands: Safex, Indo Swiss and Smith n Smith. The company has a pan-India direct distribution network of over 14,950 active dealers and has eliminated intermediaries to improve margins and customer touchpoints.
- Specialty Chemicals – Through wholly owned subsidiary Shogun Organics, Safex manufactures agrochemical active ingredients and household insecticides. Notably, it developed and patented Renofluthrin, India’s first indigenous mosquito repellent molecule and has a supply agreement with Godrej Consumer Products.
- CDMO Business – Through Briar Chemicals in the UK, acquired in 2022. Safex provides custom synthesis and formulation services to major agrochemical players including Bayer AG, with a long-term contract.
This end-to-end presence across the agrochemical value chain gives internal synergies, backward integration, margin enhancement and supply chain optimization.
Safex Chemicals IPO: Financial Performance
Safex’s revenue from operations grew at a CAGR of ~17% from FY23 to FY25 to INR 1,584.78 crore in FY25 (vs. INR 1,161.02 crore in FY23). The revenue break-up in FY25 was:
- Branded Formulations: INR 989.99 crore
- Specialty Chemicals: INR 274.15 crore
- CDMO: INR 428.11 crore
However, the bottom line has been under pressure. Despite an EBITDA of INR 233.03 crore and an EBITDA margin of 14.7%, the company reported a net loss of INR 14.29 crore in FY25 due to exceptional items and tax costs. Return ratios are under pressure with ROE at -2.12% and ROCE at 10.65%.
On the balance sheet front, the company has net debt-to-equity of 0.95x, a leveraged but manageable capital structure. The IPO’s proceeds will be used to repay borrowings of INR 365.58 crore (including subsidiary-level debt).
Operational Footprint and Manufacturing Capabilities
Safex has 8 manufacturing facilities, 6 in India (branded formulations), 1 in Pune (specialty chemicals) and 1 in Norwich, UK (CDMO). As of FY25:
- Powder formulations: 78.81% capacity utilization
- Granules and liquids: 56.62% and 15.58% respectively
- Specialty chemicals: 19.98% utilization (scope for scale-up)
- CDMO: 29.38% utilization (integration and demand cycle lags)
The company is expanding its “Golden Farms” ag-tech platform to connect farmers, dealers and agri-experts. With 17,413 dealers already onboarded, it wants to digitise engagement and promote product discovery and analytics-led insights.
Sector Tailwinds: Agrochemicals, Specialty Chemicals, CDMO
India’s specialty chemicals market is valued at USD 89 billion in FY24 and is expected to reach USD 145 billion by FY30, growing at 8.5% CAGR driven by global supply chain diversification away from China and increasing demand across agrochemicals, home care and pharma sectors. Agrochemicals specifically are expected to touch USD 33.4 billion by FY30, forming 23% of India’s specialty chemical pie.
India’s agriculture sector contributes 17.7% to GVA and employs over 46% of the population, offering huge opportunities for crop protection products and productivity-enhancing chemicals.
Safex’s strategic integration, local manufacturing edge, strong product pipeline and IP-driven R&D give it a strong play in this growing market.
Investment Highlights
- Presence across value chain: Backward integrated model across formulation, specialty chemicals and CDMO
- Geographic diversification: Operating in 22 countries across 6 continents
- Strong promoter & institutional backing: ChrysCapital owns 44.80% stake
- Innovation-led: 6 patents, 17 R&D scientists and INR 182.7 crore revenue from new products in FY25
- Digital and direct: Direct-to-dealer model with digital integration for real-time dealer support and analytics
Risks and Challenges
Profitability not yet stable despite strong topline
- High working capital intensity: Inventory-heavy formulation business affects cash cycles
- Customer concentration: Dependent on key customers like Godrej (specialty) and Bayer (CDMO)
- Underutilised capacities in CDMO and speciality chemicals will limit operating leverage in the near term
Final Words
With a strong platform across the agrochemical value chain, backed by strategic acquisitions and a multi-brand strategy, Safex Chemicals is ready to ride the growth in India’s agriculture and global specialty chemical markets. The IPO is a big step in Safex’s journey from an agrochemical company to a diversified, innovation-led, multinational chemical company.
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