Mumbai-based Dorf Ketal Chemicals India, a leading name in speciality chemicals, has taken a significant step towards going public by filing its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The company is eyeing a massive INR 5,000 crore through its IPO, the issue comprises fresh equity shares and an offer for sale by its promoter, the Menon Family Holdings Trust.
Dorf Ketal IPO – Breakdown
Dorf Ketal IPO is structured to raise INR 1,500 crore via new shares and another INR 3,500 crore through the sale of existing shares by the promoters. There’s also a provision of a pre-IPO placement of INR 300 crore, which, if it happens, would adjust the size of the fresh issue.
The funds raised will be used for several strategic uses:
- A major portion, INR 829 crore, will go towards reducing the company’s debt.
- Dorf Ketal Chemicals FZE, its subsidiary, would receive an additional INR 333 crore to assist with loan repayment.
- The rest will be used for general corporate needs.
Company Background
Founded back in 1992, Dorf Ketal has grown to become a global powerhouse in speciality chemicals. With an emphasis on R&D and innovation, it serves industries like oil and gas, refining, petrochemicals, and more. The company has 16 manufacturing plants spread across four countries, with a significant presence in India. Dorf Ketal has a strong hold on intellectual property, with 542 patents outside India (including 99 in the U.S.) and 29 within the country.
Speciality chemicals for hydrocarbons are the main focus of the company, making up 81% of its revenue in FY24. Dorf Ketal’s clientele includes bigger industry players such as Reliance Industries, Petronas, Indian Oil Corporation and others. Dorf Ketal served 1,322 customers globally by September 2024, with the top 10 accounting for over 33% of revenue in the first half of FY25. The company’s latest acquisitions are:
- In June 2024, Dorf Ketal acquired Impact Fluid Solutions LP, boosting its energy transition solutions.
- Earlier acquisitions like Fluid Energy Group’s business in January 2023 and Clariant’s North American operations in March 2023 have helped them expand and diversify.
Dorf Ketal demonstrates its commitment to innovation with R&D centres in India, Singapore, Canada, and Brazil, supported by 116 R&D staff as of October 2024. They are advancing eco-friendly solutions like HCR-7000-WL®, a proprietary alternative to hydrochloric acid for various industries, and ACtify®, a polymerization inhibitor that reduces monomer losses, extends run lengths, and lowers costs in monomer production.
Financial Performance
Financially, Dorf Ketal is on an upward trajectory:
- In FY24, the company’s profit jumped by 33.4% to INR 602 crore, with revenues up by 41.7% to INR 5,479.5 crore.
- For the first half of FY25, Dorf Ketal reported revenues of INR 2,961.4 crore and a profit of INR 231.6 crore.
Debt and IPO Management
As of October 2024, Dorf Ketal’s consolidated debt stood at INR 3,540.8 crore, which they plan to tackle with part of the IPO proceeds. The company has lined up six merchant bankers to manage the IPO, from JM Financial to Morgan Stanley. MUFG Intime India will serve as a registrar to the issue.
Looking Forward
With this IPO, Dorf Ketal Chemicals isn’t just looking to expand but also to solidify its position in the speciality chemicals market. Their blend of financial growth, strategic acquisitions, and a focus on innovation makes this IPO an interesting watch for anyone in the market.
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