IPO Watch: Allchem Lifescience files draft papers with SEBI to raise ₹190 crore via fresh issue; Check details

IPO Watch: Allchem Lifescience Limited has filed its draft red herring prospectus (DRHP) with the capital market regulator, Securities and Exchange Board of India (SEBI), for an initial public offering (IPO).

Founded in 2017, Allchem Lifescience is an Indian producer of active pharmaceutical ingredients (API) intermediates and specialty chemicals. The firm focuses on creating key starting materials (KSMs), generic API intermediates, and specialty chemicals. It plays a significant role in the manufacture of piperazine derivatives, essential raw materials for the production of APIs such as Quetiapine. As of December 2024, the company boasts a reaction volume of 1,134 KL and a hydrogenation capacity of 60 KL, ranking it among the largest in India, per the CARE report.

Allchem Lifescience serves major domestic and international clients, including Alembic Pharmaceuticals Ltd, Bond Chemical Ltd, Chemosyntha BV, Cohance Life Sciences Ltd, Egene Co Ltd, Hattori Corporation, Huaian Jiamu Biotechnology Co. Ltd, Indoco Remedies Ltd, Megafine Pharma (P) Ltd, Micro Labs Ltd, Moehs Iberica, S.L., MSN Laboratories Private Ltd, Nagase India Private Ltd, Neogen Chemicals Ltd, Neuland Laboratories Ltd, Olon Active Pharmaceutical Ingredients India Private Ltd, Unichem Laboratories Ltd, Vasudha Pharma Chem Ltd, and Vivatis Pharma GmbH.

The company has shown steady growth in its financial performance across various metrics. From FY22 to FY24, its revenue from operations increased at a CAGR of 12.75%. For the six-month period ending September 30, 2024, and for FY24, FY23, and FY22, the revenue from operations stood at ₹784.48 million, ₹1,374.21 million, ₹1,057.19 million, and ₹1,081.01 million, respectively. Additionally, the profit after tax (PAT) experienced a CAGR of 28.65% from March 31, 2022, to March 31, 2024.

IPO details

The IPO includes a fresh issuance of equity shares with a face value of ₹10 each, aggregating up to ₹190 crores, along with an offer for sale of up to 7,155,000 equity shares also with a face value of ₹10 each.

The offer for sale features up to 3,577,500 equity shares of face value ₹10 each from Kantilal Ramanlal Patel and another 3,577,500 equity shares of face value ₹10 each from Manisha Bipin Patel (the Promoter Selling Shareholder).

Allchem Lifescience intends to allocate approximately ₹130 crores from the net proceeds for the full or partial repayment or pre-payment of specific borrowings obtained by the company, as well as for general corporate purposes and to meet the business needs of the company. Emkay Global Financial Services Ltd serves as the sole Book Running Lead Manager for this issue.

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