Laxmi Organic IPO

Apply 0
Avoid 0

(i) They are a leading manufacturer of Acetyl Intermediates and Specialty Intermediates with almost three decades of experience in large scale manufacturing of chemicals. Since the inception in 1989, they have been on a journey of transformation. They initially started manufacturing acetaldehyde and acetic acid in 1992, and soon thereafter moved on to manufacturing of ethyl acetate in 1996. 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 (source: Frost & Sullivan Report). Further, post completion of the YCPL Acquisition, their market share in the ethyl acetate market will be further enhanced.

(ii) In 2010, they commenced manufacturing the Specialty Intermediates by acquiring Clariant’s diketene business. They believe that the diversification of their product portfolio into varied chemistries in Specialty Intermediates has enabled them to create a niche for themselves 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 (source: Frost & Sullivan Report).

(iii) Their products are currently divided into two broad categories, namely the Acetyl Intermediates and the Specialty Intermediates.

a) Acetyl Intermediates include ethyl acetate, acetaldehyde, fuel-grade ethanol and other proprietary solvents,

b) The Specialty Intermediates comprises of ketene, diketene derivatives namely esters, acetic anhydride, amides, arylides and other chemicals.

(iv) 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. They also propose to diversify into manufacturing of specialty fluorochemicals to which end, we have recently acquired assets including plant & machinery, design and operating paperwork, REACH registrations and patents of Miteni, a manufacturer of organic fluorospecialties and electrochemical fluorination. They believe they are well placed to enter into the high margin specialty fluorochemicals space through this acquisition.

(v) According to the Frost & Sullivan Report, given their expertise in the Acetyl Intermediates and the Specialty Intermediates segments, their entry into the fluorochemicals space will put us at a differentiated position from other chemicals manufacturers.


Click here to open your account in Upstox and join our exclusive WhatsApp group for all IPO & buyback-related discussions where all your doubts like whether to apply in an IPO, when to sell etc. will be answered by our IPO experts.


Objects of the Laxmi Organic IPO:

The Offer comprises the Offer for Sale and the Fresh Issue. a) Offer for Sale (300 Cr) The proceeds of the Offer for Sale shall be received by the Promoter Selling Shareholder upto Rs.300 Cr. b) Fresh Issue (300 Cr) Fresh Issue of Equity Shares aggregating upto Rs.300 Cr. The Company proposes to utilise the Net Proceeds from the Fresh Issue towards funding the following objects: 1. Investment in our wholly owned Subsidiary, Yellowstone Fine Chemicals Private Limited (“YFCPL”) for part-financing its capital expenditure requirements in relation to the setting up of a manufacturing facility for fluorospecialty chemicals (“Proposed Facility”. 2. Investment in YFCPL for funding its working capital requirements. 3. Funding capital expenditure requirements for expansion of our SI Manufacturing Facility (“Proposed Expansion”). 4. Funding working capital requirements of our Company. 5. Purchase of plant and machinery for augmenting infrastructure development at our SI Manufacturing Facility. 6. Prepayment or repayment of all or a portion of certain outstanding borrowings availed by our Company and our wholly owned Subsidiary, Viva Lifesciences Private Limited (“VLPL”).

Laxmi Organic IPO Details:

Open Date: Mar 15 2021
Close Date: Mar 17 2021
Total Shares: 4,61,53,846
Face Value: ₹ 2 Per Equity Share
Issue Type: Book Built
Issue Size: 600 Cr.
Lot Size: 115 Shares
Issue Price: ₹ 129-130 Per Equity Share
Listing At: NSE,BSE
Listing Date: Mar 25 2021

Promoters And Management:

(i) Ravi Goenka, aged 58 years, is the Chairman and Managing Director of the Company. He holds a bachelors’ degree in chemical engineering from Bangalore University. He has been associated with the Company since inception, and has approximately 30 years of experience in the chemicals and paper industries, 16 years of experience in the education industry, and 21 years in the power industry. (ii) Satej Nabar, aged 56 years, is an Executive Director and Chief Executive Officer of the Company. He holds a bachelors’ degree in mechanical engineering from the University of Bombay, a masters’ degree in plastic engineering from the University of Bombay, and is a chartered engineer registered with the Institution of Engineers (India). He has been associated with the Company since April 1, 2020 and has around 31 years of experience in the chemicals industry and has handled numerous functions including, sales and marketing, corporate strategy, innovation and manufacturing. (iii) Harshvardhan Goenka, aged 31 years, is an Executive Director – Business development and Strategy of the Company. He holds a bachelors’ degree in science from Babson College, School of Business, Boston USA. He has nine years of experience in the chemicals industry. He has been associated with the Company since September 15, 2011 and heads the business development initiatives of the Company.

Financials of Laxmi Organic IPO:

Particulars (Cr) 6MFY21 Mar-20 Mar-19 Mar-18
Sales 813 1,534 1,569 1,393
Purchase of materials 209 287 250 321
Cost of Material Consumed 351 780 888 655
Changes in Inventories 12 29 -42 -9
Employee Benefit Expenses 36 69 65 53
Other expenses 119 255 255 203
Operating Profit 86 114 153 170
OPM % 10.5% 7.43% 9.75% 12%
Other Income 1 4 6 3
Interest 7 14 17 10
Depreciation 23 49 44 31
Profit before tax 56 81 98 113
Net Profit 45 70 72 76
No. of shares 22.51 22.51 25.02 5.01
EPS in Rs 2.02 2.86 2.89 3.03

Comparison With Peers:

Name of the company 5-year Revenue Growth 5 year PAT Growth EBITDA Margin (FY20) ROE  (FY20) P/E
Laxmi Organic Industries (3 Years) 7% -4% 10% 16% 65
Rossari Biotech 35% 115% 18% 23% 71
Fine Organics 11% 21% 23% 30% 45
Atul Limited 12% 24% 22% 17% 28
Aarti Industries 10% 20% 22% 23% 42
Navin Flourine International 12% 53% 25% 33% 32
SRF Limited 10% 29% 20% 22% 33

Recommendation on Laxmi Organic IPO:

Review and Recommendation of InvestorZone are 5/10 [The company has muted growth in the last few years as compared to listed peers. The margins are low too as compared to peers. Asking valuation sky-rocket as compared to peers]

Lead Manager of Laxmi Organic IPO:

  1. Axis Capital Limited

Registrar of Laxmi Organic IPO:

  1. Link Intime India Private Limited

Discussion on Laxmi Organic IPO:


    Laxmi Organic IPO subscribed 6.05 times.
    The public issue subscribed 10.38 times in the retail category, 1.15 times in QIB, and 2.48 times in the NII category by Mar 16, 2021 05:00.

    Asking valuation very high. But market is in bull territory. So apply in all IPOs for listing gain.

    Laxmi Organics has recently bought a company called Mteni. With this addition, the company has entered into the fluorospecialty chemicals. The fluorospecialty chemicals manufacture find application in inter alia the pharmaceuticals, agrochemical, aerospace and automobile industries.

    Valuation of Laxmi Organics:

    1. Total shares outstanding after IPO = 26,36,62,773

    2. IPO Price = 130 per share.

    3. Mcap = 3400 Cr

    4. Revenue = ~1500 (FY20)

    5. Mcap/Revenue = 2.26x

    6. P/E = 42x

Leave a Reply