Mumbai-based chemicals player Jesons Industries has filed IPO prospectus. The manufacturer of specialty coating emulsions (SCE) and water-based pressure sensitive adhesives (PSA) in tapes and labels is looking to mobilize as much as INR900 crore through the upcoming IPO, according to market sources. Jesons Industries IPO will be a mix of fresh shares and an offer for sale (OFS).
The company aims to raise up to INR120 crore through the fresh issue which is likely to have a reservation of up to 77,000 equity shares for employees. Out of these funds, INR90 crore are proposed to be used towards repayment of borrowings availed by its subsidiary while the remining amount will be used for general corporate purposes.
Jesons Industries IPO will also include an OFS component of 12,157,000 equity shares by promoter Dhiresh Shashikant Gosalia. The promoter currently owns 86.53% equity stake in the company.
The offer size may be reduced by INR24 crore in the event of successful private placement before the IPO.
Axis Capital Limited, and JM Financial Limited are the book running lead managers to Jesons Industries IPO, while Link Intime will be the registrar.
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Jesons Industries IPO: A play on specialty chemicals
Established in 1999, the company is a leading player in SCE and PSA categories. It has one of largest range of products in SCEs and PSAs product categories and enjoys nearly 30% market share as a leading SEC supplier to the Indian Paint Sector.
In the domestic paints industry, Jesons Industries counts Berger Paints, Indigo Paints, Kamdhenu Paints, JSW Paints, Nippon Paints, Shalimar Paints, Cosmos Twisters, Cellotape, Mexim Adhesives, Sarvodaya Industries, Storm Infracon, and SMI Coated Products, among its clients. It also supplies to global players where its clients include Apollo Paints, Kansai Nerolac, Moon Star Paints, Caparol Paints, Lalan Printing and Packaging, Tuftape, Well Accessories, and Western Paper Industries.
Further, it also supplies SCE products to various players in the construction chemicals industry such as Forsoc Chemicals, SIKA India. In addition to paints, its products are used in packaging, and chemicals for construction, textiles, leather, carpet and paper industries.
The company has a strong foothold in high-growth markets across Asia-Pacific, Middle East and Africa, for both SCE and PSA products and is one of the largest exporters of Polymers of Vinyl Acetate and Acrylic Polymers which are used in SCEs and PSAs, from India in Fiscal 2021. It exported 6,687 tons of Polymers of Vinyl Acetate and 38,888 tons of Acrylic Polymers during Fiscal 2021, which is 52.9% and 36.1% respectively of the total export of the same from India.
Jesons Industries Financial Performance (in INR crore)
| Â | FY2019 | FY2020 | FY2021 | Q1 FY2022 |
| Revenue | 923.7 | 908.7 | 1,096.5 | 443.8 |
| Expenses | 886.4 | 870.0 | 970.5 | 370.4 |
| Net income | 24.8 | 29.6 | 92.9 | 54.3 |
| Margin (%) | 2.7 | 3.3 | 8.5 | 12.2 |
The company reported a 20.7% jump in revenues in FY2021 to INR1,096.5 crore. This jump was primarily on account of a depressed base of FY2020, as well as higher revenue from supply of manufactured products in domestic and export markets, trading of raw materials, and other operating income. A sharper growth was registered in net income which surged 213.2% to INR92.9 crore in FY2021.
This healthy trend has continued in the first quarter of FY2022 as well with sales revenues standing at INR443.8 crore. In the same timeframe, it registered net earnings of INR54.3 crore, translating to the best profitability figure of 12.2% in recent times.
The specialty chemicals sector has seen hectic activity in recent times with several names tapping the primary markets. Important among these are Chemplast Sanmar, Ami Organics, Sigachi Industries and Tatva Chintan Pharma Chem.
