Speciality chem firm Clean Science and Tech planning Rs 1,400 cr IPO

MUMBAI: Pune-based speciality chemicals firm Clean Science and Technology Ltd is planning an initial public offering (IPO) of Rs 1,300-1,400 crore, according to bankers. The company, which makes performance chemicals and products for the pharmaceutical and consumer goods industries, joins the list of speciality chemicals entities that have tapped the primary market recently.

Axis Capital, JM Financial and Kotak Mahindra Capital company are likely to lead the issue as merchant bankers. The company is likely to file its draft red herring prospectus (DRHP) with the market regulator this week. Clean Science did not respond to an email query on its IPO plans.

IPOs of specialty chemicals companies have been lapped up by investors in the recent past. Last year, the issues of Rossari Biotech and Chemcon Speciality Chemicals were subscribed 79 and 149 times respectively. This year, the IPOs of Laxmi Organics and Anupam Rasayan were subscribed 107 times and 44 times. Barring Anupam Rasayan, all other companies posted strong listing day gains.

Analysts said the increased appetite for IPOs from special chemicals makers has been because of India's improving position in the global market.

Clean Science reported a 7% growth in sales in FY20 to Rs 419 crore while its profits jumped 43% to Rs 139.6 crore with a margin of 33%.

The company is focused on developing eco-friendly and sustainable manufacturing processes and has devised multiple novel and clean processes for its products, by working extensively in developing better catalyst systems.

The company has multiple manufacturing facilities in Kurkumbh, MIDC Maharashtra that are automated to maintain high levels of accuracy and efficiency.

Clean Science and Technology is known for an established market position and dominant presence in key specialty chemical products, well-diversified clientele, and application of the products largely in industries manufacturing essentials which limits the impact of COVID-19 pandemic. Nearly two third of revenue comes from export

Clean Science Technology’s products are used as key starting level materials, as inhibitors, or as additives, by customers, for products.