Mumbai-based Survival Technologies Limited, a contract research and manufacturing services ("CRAMS") with a focus on speciality chemical manufacturing in India has filed its Draft Red Herring Prospectus (DRHP) with the markets regulator, Securities and Exchange Board of India (SEBI), to raise Rs 1,000 crore through an initial public offering (IPO).
The public issue with a face value of Rs 2 per equity share consists of a fresh issue of equity shares worth up to Rs 200 crore and an offer-for-sale (OFS) of up to Rs 800 crore by Promoter and selling shareholders, which comprises up to Rs 544.41 crore by Vijaykumar Raghunandanprasad Agrawal, Rs 212.41 crore by Nimai Vijay Agrawal, and Rs 43.18 crore by Prabha Vijay Agarwal.
The Offer is being made through the Book Building Process, wherein not more than 50% of the Offer shall be available for allocation to Qualified Institutional Buyers, not less than 15% of the Offer shall be available for allocation to Non-Institutional Bidders and not less than 35% of the Offer shall be available for allocation to Retail Individual Bidders.
The company, in consultation with the lead bankers to the issue, may consider a Pre-IPO placement of specified securities for cash consideration. If such placement is completed, the issue size will be reduced accordingly.
The proceeds from the fresh issuance worth Rs 175 crores will be used towards funding its working capital requirements and general corporate purposes.
The Mumbai-based company is engaged in the supply of specialty chemicals with multiple applications and many products that it sells domestically are import substitutes that were formerly imported from China. According to a CRISIL report mentioned in the DRHP, it is one of the most profitable companies manufacturing speciality chemicals in India in Fiscal 2022 based on the analysis of the margins of Indian companies operating in the speciality chemicals industry. Its leadership team is led by Chairman and Wholetime Director - Mr Vijaykumar Raghunandanprasad Agrawal who has 4 decades of experience in the specialty chemicals sector and Mr Nimai Agrawal who is the MD and CEO.
It is one of the few speciality chemical manufacturers in India manufacturing select products from the heterocyclic and fluoro organic product groups for sale in India and globally. (Source: CRISIL Report). Between April 1, 2007 and March 31, 2022, it had synthesized 677 products of which over 500 products have been commercially produced and sold to various customers across its export markets. Key application of its products are towards Agrochemicals, Cosmetics, Paints, Biotech, Pharmaceuticals, Polymers, X ray Films and Perfume industry.
Survival Technologies, key customers include multinational corporations such as Evonik Industries AG ("Evonik"), Chori Co. Limited ("Chori"), BioSpectra Inc. ("BioSpectra"), LBB Specialities, Procos, MOEHS Iberica, S.L., Sumitomo Corporation, Synthetics USA, LLC, Alzchem Trostberg GmbH and domestic companies such as Lee Pharma Limited, MSN Laboratories Private Limited, Sai Life Sciences Limited, and Dr. Reddy's Laboratories. As of June 30, 2022, it had served 201 customers.
It has three manufacturing facilities, two of which are located in Ankleshwar, Gujarat and one located in Sarigam, Gujarat is ISO and GMP certified and its facilities are equipped with advanced infrastructure including reactors and automated systems that ensure efficiency in its manufacturing process. With an intent to scale its annual capacity to manufacture products it is planning a new manufacturing facility in Mahad, Maharashtra.
Survival Technologies operates in the speciality chemicals industry, with low-volume, high-value chemicals with specific applications classified based on end-user industries and competes with firms which includes Navin Fluorine International Limited, Alkyl Amines Chemical Limited, Aether Industries Limited and Neogen Chemicals Limited.
Survival Technologies' revenue from operations increased by 13.46% from Rs 274.79 crore in Fiscal 2021 to Rs 311.78 crore in Fiscal 2022, attributable to an increase in revenue from contracts with customer, whereas profit after tax grew 30.43% to Rs 73.46 crore in Fiscal 2022, as compared to Rs 56.32 crore in Fiscal 2021.
For the three months ended June 30, 2022 revenue from operations stood at Rs 100.02 crore and profit after tax stood at Rs 24.88 crore.
India is the world's sixth-largest chemical manufacturer, and accounts for 3.4% of worldwide chemical production. The Indian chemical industry was valued $ 178 billion in 2019 and is expected to increase to $ 304 billion dollars by 2025. The Indian chemical industry ranks sixth-place globally and fourth place in Asia. According to a CRISIL analysis, India ranks eighth in the world for chemical exports (excluding pharmaceutical products) and seventh for chemical imports (excluding pharmaceutical products).
JM Financial Limited, and ICICI Securities Limited are the book-running lead managers and Link Intime India Private Limited is the registrar to the issue.