IPO Analysis: Laxmi Organic Industries Limited

IPO Analysis: Laxmi Organic Industries Limited

Laxmi Organic Industries Limited is a leading manufacturer of Acetyl Intermediates and Specialty Intermediates with almost 3 decades of experience in large scale manufacturing of chemicals. They are currently among the largest manufacturers of ethyl acetate in India with a market share of approximately 30% of the Indian ethyl acetate market. Further, post completion of the YCPL Acquisition, their market share in the ethyl acetate market will be further enhanced. In 2010, they commenced manufacturing the Specialty Intermediates by acquiring Clariant’s diketene business. They are the only manufacturer of diketene derivatives in India with a market share of approximately 55 % of the Indian diketene derivatives market in terms of revenue in Fiscal 2020 and one of the largest portfolios of diketene products.

Their products are currently divided into 2 broad categories, namely the Acetyl Intermediates and the Specialty Intermediates. The Acetyl Intermediates include ethyl acetate, acetaldehyde, fuel-grade ethanol and other proprietary solvents, while the Specialty Intermediates comprises of ketene, diketene derivatives namely esters, acetic anhydride, amides, arylides and other chemicals. Their products find application in various high-growth industries, including pharmaceuticals, agrochemicals, dyes & pigments, inks & coatings, paints, printing & packaging, flavours & fragrances, adhesives and other industrial applications.

Competitive Strengths

• Leading manufacturer of ethyl acetate with significant market share;
• Only Indian manufacturer of diketene derivatives with a significant market share and one of the largest portfolios of diketene products;
• Diversified customer base across high growth industries and long-standing relationships with marquee customers;
• Strategically located manufacturing facilities, vertical integration and supply chain efficiencies;
• In-house research and development capabilities and consistent track record of technology absorption;
• Global presence and low geographical concentration;
• Differentiated business model, asset base, product mix and experience in handling complex chemistry create high entry barriers; and
• Experienced promoter, board of directors and key managerial personnel.

Brief Financial of Company (Rs in Crs)

Objective of the Issue:

• Investment in subsidiary firm, Yellowstone Fine Chemicals Private Limited (YFCPL) to partly finance the capex to establish a new manufacturing facility.
• To invest in YFCPL for financing working capital requirements.
• To finance the capex for expansion of SI manufacturing facility.
• To finance business working capital requirements.
• To purchase plant and machinery for infrastructure development at SI facility.
• To make prepayment or repayment of borrowings availed by the company and subsidiary, Viva Life sciences Pvt Ltd (VLPL).
• To meet general corporate purposes.

Some Dates to Remember:

Verdict:

One can apply for this IPO for listing gains, GMP is 85-90 (as on 10-03-2021)

Sources: Various publications

Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

Follow, Like, subscribe and share

"Your Trust, Our Financial Expertise."

Infyture, Investment For Your Future

Email: infyture@gmail.com

Website: http://infyture.wordpress.com

Facebook Page: https://www.facebook.com/infyture4future/

Youtube:https://www.youtube.com/channel/UCjOxVGTKQiK5O0mdcuMBCdw?view_as=subscriber

Blogger: https://infyture.blogspot.com/

WhatsApp: https://wa.me/message/SXE3AQCBR3O4B1

Telegram: https://t.me/infyture

Goal Based Planning || Equity Tip || Demat Account || Mutual Fund Investment || Life Insurance || General & Health Insurance || PMS & mini PMS || Retirement Planning || NPS Enrollment