Mumbai-based GEM Aromatics, a leading manufacturer of speciality ingredients such as essential oils and aroma chemicals, has taken a significant step toward expansion by filing its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise INR 175 crore through an Initial Public Offering (IPO).
GEM Aromatics IPO Details
The IPO includes a fresh issue of equity shares worth INR 175 crore and an Offer-for-Sale (OFS) of 89.24 lakh shares by the company’s promoters and an existing investor, doTERRA Enterprises. The promoters—Vipul Parekh, Kaksha Vipul Parekh, Yash Vipul Parekh, and the Parekh Family Trust—will participate alongside doTERRA Enterprises, a US-based investor holding a 25% stake in GEM Aromatics since 2019. The Parekh family controls the remaining 75%.
To strengthen its balance sheet, GEM Aromatics plans to allocate INR 140 crore from the proceeds to reduce debt, with the rest earmarked for general corporate purposes. As of October 2024, the company’s total borrowings stood at INR 153.6 crore.
Additionally, the company may raise up to INR 35 crore through a pre-IPO placement. If this option is exercised, the fresh issue size will be adjusted proportionately.
Business Overview of GEM Aromatics
Founded in 1999, GEM Aromatics has established itself as a leader in essential oils and aroma chemicals, primarily derived from mint and clove oil. Its product offerings cater to industries like oral care, cosmetics, nutraceuticals, pharmaceuticals, wellness, and personal care.
The company’s diverse client base includes major names such as Colgate Palmolive India, Dabur India, Patanjali Ayurved, SH Kelkar, and Rossari Biotech. Notably, doTERRA Global contributed 18.89% of the company’s revenue in FY 2024, reinforcing its significance as a business partner.
GEM Aromatics – Financial Performance
GEM Aromatics has posted steady financial growth in recent years. Key metrics include:
| Particulars | FY 2022 | FY 2023 | FY 2024 | H1 2025 |
|---|---|---|---|---|
| Revenue from Operations (INR Crore) | 314.33 | 424.79 | 452.45 | 204.89 |
| Total Income (INR Crore) | 316.97 | 425.09 | 454.23 | 206.52 |
| Profit After Tax (INR Crore) | 31.19 | 44.67 | 50.10 | 18.33 |
| EPS (INR) | 6.66 | 9.53 | 10.69 | 3.91* |
*For six months ended 30 September 2024.
Market Position and Competitive Edge
GEM Aromatics has carved out a dominant position in India’s essential oils segment, particularly in mint and clove derivatives. According to the F&S Report, it ranked as the largest procurer of Piperita oil and the leading processor of DMO, Clove Oil, Eugenol, and Eucalyptus Oil in FY 2024. The company holds a commanding 62% market share in Eugenol production domestically.
Its manufacturing capabilities leverage advanced technologies such as Grignard’s reactions, amide coupling, Friedel-Crafts processes, and photochemical reactions, all while focusing on green chemistry principles. With dedicated R&D facilities, GEM Aromatics continues to drive innovation and sustain high-quality production standards.
With 170 domestic customers and 30 international clients across 13 countries—including markets in the Americas, Asia, Africa, and Australia—GEM Aromatics has built a robust distribution network. It serves clients through direct sales, subsidiaries, and third-party agencies, reflecting its global appeal and operational flexibility.
IPO Objectives and Strategy
The funds raised through the GEM Aromatics IPO will primarily be directed toward debt reduction, strengthening the company’s financial foundation. The balance will support corporate expansion and working capital requirements. This approach positions the company for sustained growth while enhancing its market presence.
BRLM & Registrar
- Lead Manager: Motilal Oswal Investment Advisors
- Registrar: Kfin Technologies
- Purpose: Debt reduction and corporate growth
Conclusion
GEM Aromatics’ DRHP filing signals a pivotal moment in the company’s growth trajectory. Its focus on reducing debt, scaling operations, and leveraging its expertise in essential oils and aroma chemicals positions it as a compelling investment opportunity.
With a diversified product portfolio, robust client relationships, and innovative production processes, GEM Aromatics is well-equipped to strengthen its domestic footprint and global reach. Investors and analysts will closely watch the progress of this IPO as GEM Aromatics files DRHP and prepares to debut on the capital markets.
