Fine Organic Industries Limited IPO
(i) The Company, Fine Organic Industries Limited, founded in 1970, is the largest manufacturer of oleochemical-based additives in India and a strong player globally in this industry.
(ii) The wide range of specialty plant derived oleochemicals -based additives used in the food, plastic, cosmetics, paint, ink, coatings and other specialty application in various industries. As at December 31, 2017, they had a range of 387 different products sold under the ‘Fine Organics’ brand.
(iii) They had 603 direct customers (i.e., end -users of our products) and 127 distributors as on 31st Dec 2017 (who sold their products to more than 5,000 customers) from 67 countries. Their customers are multinational, regional and local players manufacturing consumer products, such as Hindustan Unilever and Parle Product and petrochemical companies and polymer producers globally. Their plastics additives and specialty additives are also used in the packaging of foods and other fast moving consumer goods.
(iv) The additives are specialty products, and this industry enjoys premium margins with only a few players dominating the industry globally. Proprietary technology to manufacture these specialty additives is available with only a few global players. Fine Organic Industries Limited is one of the leading players that developed proprietary technologies to manufacture these green additives
Objects of the Fine Organic Industries Limited IPO:
Fine Organic Industries Limited IPO
are: This is pure OFS vide which promoters of the company are selling up to 7,664,994 no. of shares to public. So this means that company will not get anything from this IPO.Fine Organic Industries Limited IPO Details:
| Current GMP: | 38-40 |
| Open Date: | Jun 20 2018 |
| Close Date: | Jun 22 2018 |
| Total Shares: | 7,664,994 |
| Face Value: | ₹ 5 Per Equity Share |
| Issue Type: | Book Built Issue IPO |
| Issue Size: | 600.16 Cr. |
| Lot Size: | 19 Shares |
| Issue Price: | ₹ 780-783 Per Equity Share |
| Listing At: | NSE,BSE |
| Listing Date: | Jul 02 2018 |
Promoters And Management:
Capital Structure:
| (i) Authorized Share Capital 40,000,000 shares at FV@5) | 20 Cr |
| (ii) Issued, Subscribed,& Paid-up Share Capital Before Issue (30,659,976 Shares at FV@5) | 15.32 Cr |
| (iii) Present Issue OFS to public ( 7,664,994 Shares at FV@5) | 3.83 Cr |
| (iv) Reservation for QIB (38,32,497 Shares at FV@5) | 50% |
| (v) Reservation for HNI (11,49,749 Shares at FV@5) | 15% |
| (vi) Reservation for Retail (26,827,47 Shares at FV@5) | 35% |
| (vii) Paid Up Share Capital after the issue | 15.32 Cr |
| Sr.no | Name of the Shareholder | no. of shares before IPO | No. of Shares offered in IPO | % of Shares offered |
| 1 | Prakash Damodar Kamat | 5982840 | 1530005 | 26% |
| 2 | Jyotsna Ramesh Shah | 5870862 | 1544976 | 26% |
| 3 | Jayen Ramesh Shah | 4953630 | 1530004 | 31% |
| 4 | Bimal Mukesh Shah | 2822436 | 705609 | 25% |
| 5 | Mukesh Maganlal Shah | 2588442 | 824397 | 32% |
| 6 | Tushar Ramesh Shah | 5229186 | 1530003 | 29% |
Financials of Fine Organic Industries Limited IPO:
| 1. Assets and Liabilities Key Parameters | |||||||
| Year | Asset(Cr) | Liabilities(Cr) | Net Worth(Cr) | Book Value | D/E [<1.5] | RONW | Receivable days |
| FY13 | 255.3 | 157.80 | 97.50 | 202 | 1.6 | 21.33% | 41 |
| FY14 | 340.20 | 180.90 | 159.30 | 330 | 1.1 | 38.73% | 49 |
| FY15 | 374.70 | 181.10 | 193.60 | 401 | 0.9 | 29.44% | 53 |
| FY16 | 418.90 | 164.50 | 254.40 | 527 | 0.6 | 29.91% | 48 |
| FY17 | 448.50 | 144.30 | 304.20 | 630 | 0.5 | 25.51% | 52 |
| 9MFY18 | 481.10 | 118.50 | 362.60 | 118 | 0.3 | 21.00% | 54 |
| 2. Profit n Loss Key Parameters | ||||
| Year | Revenue(Cr) | PAT(Cr) | EBITDA Margins | Profit Margins |
| FY13 | 497.50 | 20.80 | 10% | 4% |
| FY14 | 574.10 | 61.70 | 20% | 11% |
| FY15 | 616.50 | 57.00 | 18% | 9% |
| FY16 | 667.60 | 76.10 | 23% | 11% |
| FY17 | 792.60 | 77.60 | 18% | 10% |
| 9MFY18 | 594.70 | 58.50 | 18% | 10% |
| 3. Cash Flow Statement(all figures in Cr) | |||||
| Particulars | FY17 | FY16 | FY15 | FY14 | FY13 |
| (i) Net Cash Generated from Operation | 47.70 | 113.50 | 79.50 | 2.08 | 48.90 |
| (ii) Net Cash Generated from Investment | -11.42 | -27.96 | -65.21 | -29.18 | -10.36 |
| (iii) Net Cash Generated from Financing Activity | -58.41 | -55.62 | -20.13 | 28.38 | -32.83 |
| (iv) Total[ (i)+(ii)+(iii) ] | -22.12 | 29.92 | -5.84 | 1.29 | 5.71 |
Comparison With Peers:
Recommendation on Fine Organic Industries Limited IPO:
Fine Organic Industries Limited IPO
from our side is: Rating: 4/10. 1-5: Fair 5-7: Good 7-10: ExcellentLead Manager of Fine Organic Industries Limited IPO:
Registrar of Fine Organic Industries Limited IPO:
Company Address:
Bid Details of Fine Organic Industries Limited IPO as on
22-Jun-2018 22:30:01 IST
Discussion on Fine Organic Industries Limited IPO:
16 Comments
Leave a Reply
You must be logged in to post a comment.
Goldman Sach has bought 2.79Lacs shares in fine organics at 815. This is very good news for investor. Keep on holding this share for long term.
7,664,994 Total IPO Shares.
2,682,748 Total Retail shares.
2,668,093 Shares Got Delivered Today.
i.e. 34.8% shares got new owners.
If we assume all the retailers sold their allotments then it means 99.45% retailers are out now.
Funds of Fine IPO will be unblocked on 28th June.
As per new SEBI guidelines, the company coming up with an IPO now have to show only 3 years Financial statements in the DRHP. This will lead more companies to raise funds via IPO. However, this will have negative from the perspective of the investor as less numbers means less interpretation about the company’s performance.
SEBI has reduced the no. of days from 5 to 2 to announce the price band of IPO. Previously it was announced 5 days prior to opening of IPO for Public subscription which has now reduced it to 2. We will have to see how it will impact the grey market as now we have only 2 days to do all the grey business.
Final Closing Figures (Around 11PM, 22nd June)
QIBs: 12.86X
RII: 1.62X
NII: 21.01X
Application wise: 1.45X
Total: 8.99X
The issue has subscribed only 12% on day one.
The company has allotted 22,99,497 equity shares to 15 anchor investors at Rs 783 per scrip, garnering Rs 180.05 crore, Fine Organic Industries said in a statement.Among the anchor investors are Goldman Sachs India, HDFC Small Cap Fund, SBI Magnum Comma Fund, DSP BlackRock Equity & Bond Fund and IDFC Equity Opportunities Fund – Series 5.
FINE ORGANIC INDUSTRIES LIMITED
Fine Organic Industries Limited allots Rs. 180 crore to 15 anchor investors at Rs. 783 per equity share
Anchor investors include Goldman Sachs, Kuwait Investment Authority, Citi, Principal, Reliance, Aditya Birla, DSP Blackrock, SBI MF,
Mumbai, June 19, 2018: Fine Organic Industries Limited (the “Company” or the “Issuer”) has allotted 22,99,497 equity shares at Rs. 783 (upper end of the Price Band) aggregating to Rs. 180.05 crore to 15 anchor investors. The anchor book has a good mix of investors including sovereign wealth funds, long only FIIs as well as top domestic mutual funds and life insurance companies.
The anchor investors include: 1. GOLDMAN SACHS INDIA LIMITED (10%); 2. HDFC SMALL CAP FUND (10%); 3-A. SBI LONG TERM ADVANTAGE FUND – SERIES V (3.61%); 3-B. SBI EQUITY OPPORTUNITIES FUND SERIES I (0.28%); 3-C. SBI MAGNUM COMMA FUND (5.00%); 3-D. SBI TAX ADVANTAGE FUND SERIES II (0.56%); 3-E. SBI TAX ADVANTAGE FUND SERIES III (0.56%); 4A. DSP BLACKROCK EQUITY FUND (2.66%); 4B. DSP BLACKROCK EQUITY & BOND FUND (7.34%); 5A. IDFC LARGE CAP FUND (1.94%); 5B. IDFC EQUITY OPPORTUNITIES FUND – SERIES 5 (7.67%); 5C IDFC EQUITY SAVINGS FUND (0.39%); 6. RELIANCE CAPITAL TRUSTEE CO. LTD-A/C RELIANCE SMALL CAP FUND (10.00%); 7. KUWAIT INVESTMENT AUTHORITY FUND 224 (7.78%); 8. WHITE OAK INDIA EQUITY FUND (4.04%); 9. INDIA ACORN FUND LTD (3.73%); 10. NEW HORIZON OPPORTUNITIES MASTER FUND (7.78%); 11. ADITYA BIRLA SUN LIFE INSURANCE COMPANY LIMITED (5.55%); 12. PRINCIPAL TRUSTEE CO. PVT LTD. – PRINCIPAL MUTUAL FUND – PRINCIPAL EMERGING BLUECHIP FUND (2.78%); 13. EDELWEISS TRUSTEESHIP CO LTD AC- EDELWEISS MF AC-EDELWEISS BALANCED ADVANTAGE FUND (2.78%); 14. CITIGROUP GLOBAL MARKETS MAURITIUS PRIVATE LIMITED (2.78%); and 15. DB INTERNATIONAL (ASIA) LTD (2.78%).
Fine Organic Industries Limited (the “Company”) proposes to open on Wednesday, June 20, 2018*, an initial public offering of 7,664,994 Equity Shares through an offer for sale by the promoter group selling shareholders
****************GMP Latest Updates***************************
RITES 37/39
Fine organics 40/45
The Company valuations are not comfortable both in terms of P/E and P/B. So one can look to invest for long term as company business is unique and they are doing lot of expansion work in coming years which will ultimately boost revenue and margins.
The company uses vegetable oils, including rapeseed oil, palm oil, palm kernel oil, sunflower oil, castor oil, soybean oil, rice bran oil as a raw material and it represents around 62% of the total expense. The company primarily import raw materials derived from palm and palm kernel oil. Recently , in Nov 2017, the govt of India has increased the tax on crude palm oil to 30% from 15%, and increased import tax duty on refined palm oil imports to 40% from 25%. This will dampens the margin further from next fiscal.
As on 31.12.2017, the company has total debt of 34.5 Cr on books( long term debt=0 & Short Term Debt=34.5 Cr). The company has total equity 362 Cr. So Debt/Equity is almost nil. It is a debt free company.
Fine Organic Industries Limited Strengths
1. Largest Producer of Oleochemical-based Additives in India and One of the Few Large Players in the Oleochemicalbased Additives Industry in the World
2. Diversified Product Portfolio Catering to a Variety of High Growth Industries
3. Specialised Business Model with High Entry Barriers
4. Flexible and Strategically Located Production Facilities with In-house Development Capabilities
5. Strong R&D Capability with a Focus on Innovation
6. Diversified Customer Base with Long-Term Relationships with Marquee Customers
Fine Organic Industries Manufacturing Units and Expansion plans
(a) They currently have three production facilities: one in Ambernath , one in Badlapur, and one in Dombivli all are in Maharashtra with combined installed capacity of approximately 64,300 tonnes per annum.
(b) The Company is looking to acquire Olefine Organics partnership firm and a Promoter Group entity, at a manufacturing facility in Ambernath in the fourth quarter of Fiscal 2018.
(c) They are also planning to set up an additional production facility in Ambernath with a planned installed capacity of 32,000 tonnes per annum (the “ Third Ambernath Facility ”).They expect it to commence operations in the fourth quarter of Fiscal 2019. In addition, they are currently planning to set up a new production facility in Leipzig, Germany with a planned initial installed capacity of 10,000 tonnes per annum (the “German Facility”) and they expect it to commence operations in the third quarter of Fiscal 2020. This facility will be owned and operated by a joint venture company in which they will have 50% equity interest.
(d) They are also in the preliminary stages of planning the development of two additional production facilities: one in Patalganga (Maharashtra) with a planned initial installed capacity of approximately 10,000 tonnes per annum (the “Patalganga Facility ”); and one in Ambernath (Maharashtra)
(e) They have a dedicated R&D facillity Mahape, Navi Mumbai.
Fine Organics IPO – Issue Information *(TENTATIVE)*
Issue Opens on: 20 June 2018
Issue Closes on: 22 June 2018
Issue Type: Book Built Issue IPO
Issue Size: 76,64,994 Equity Shares
Face Value: Rs 5 per Equity Share
Issue Price: Rs.775 – Rs.785 per Equity Share
Market Lot: 19 shares
Listing At: NSE, BSE
Equity Shares outstanding prior to the Issue = 3,06,59,976 Equity Shares
Offer for Sale of 76,64,994 Equity Shares @1000 = Rs.766.50 Crores
Equity Shares outstanding after the Issue = 3,06,59,976 Equity Shares
Category-wise Break up:.
Anchor – 22,99,497 Shares = 180.51Crs
QIB – 15,32,999 Shares = 120.34Crs
NII – 11,49,750 Shares = 90.26Crs
RII – 26,82,748 Shares = 210.60Crs (Lot size: 19 = 1,41,197 Forms)
Total Issue – 76,64,994 Equity Shares = 601.70Crs.
Subscription required for 1X
RII = 1,41,197 Forms
NII = 90.26 Crs
Interest cost @5%p.a. for 7days = 75.274paise for 1X
Fine Organics IPO – Financial Information (Basis of Valuation)
EPS for FY14-15 >>> Rs.19.70 (Page #92 of DRHP)
EPS for FY15-16 >>> Rs.24.85 (Page #92 of DRHP)
EPS for FY16-17 >>> Rs.25.33 (Page #92 of DRHP)
EPS for 9M17-18 >>> Rs.25.34 (Page #92 of DRHP)
RoNW for FY14-15 >>> 29.46% (Page #93 of DRHP)
RoNW for FY15-16 >>> 31.35% (Page #93 of DRHP)
RoNW for FY16-17 >>> 26.51% (Page #93 of DRHP)
RoNW for 9M17-18 >>> 16.64% (Page #93 of DRHP)
NAV as on December 31, 2017 was Rs.114.76 (Page #94 of DRHP)
Listed Industry Peer Group (Page #94 of DRHP): NONE