Laxmi Organic Industries Limited Initial Public Offering of Equity Shares opening on Monday, March 15, 2021

• Price Band of Rs. 129 – Rs. 130 per equity share of the face value of Rs. 2 each of Laxmi Organic Industries Limited (“Equity Share”)
• Bid/Offer Opening Date – Monday, March 15, 2021, and Bid/Offer Closing Date – Wednesday, March 17, 2021
• The minimum bid lot is 115 Equity Shares and in multiples of 115 Equity Shares thereafter
• The floor price is 64.50 times the face value of the Equity Shares and the Cap Price is 65.00 times the face value of the Equity Shares.

MUMBAI: Laxmi Organic Industries Limited(“Company” or “Laxmi Organic”), will open the Bid/Offer period in relation to its initial public offering of Equity Shares (the “Offer”/ “IPO”) on Monday, March 15, 2021, and close on Wednesday, March 17, 2021. The price band for the Offer has been decided at Rs. 129 – Rs. 130 per Equity Share. The Company may, in consultation with the book running lead managers (the “BRLMs”), consider participation by anchor investors (“Anchor Investors”) which shall be one Working Day prior to the Bid/Offer Opening Date, i.e. Friday, March 12, 2021.

The Offer aggregating up to Rs. 600 crore and comprises of fresh issuance of Equity Shares of up to Rs. 300 crore (the “Fresh Issue”) and an offer for sale of Equity Share up to Rs. 300 crore by promoter selling shareholder, Yellow Stone Trust (“Promoter Selling Shareholder”) (the “Offer for Sale”, and together with the Fresh Issue, the “Offer”).

The Company, in consultation with the BRLMs, undertook a private placement of 15,503,875 Equity Shares aggregating to Rs. 200 crores (the “Pre-IPO Placement”). The size of the Fresh Issue, after the Pre-Ipo placement, has been reduced from Rs. 500 crore to up to Rs. 300 crore and consequently, the Offer Size has been reduced from up to Rs 800 crore million to up to Rs 600 crore.

The Company proposes to utilize the net proceeds towards prepayment or repayment of all or a portion of certain outstanding borrowings availed by the Company; funding the capital expenditure requirements for setting up of a manufacturing facility for floor specialty chemicals (“Proposed Facility”) pursuant to investment in the wholly-owned subsidiary, Yellowstone Fine Chemicals Private Limited (“YFCPL”); investment in YFCPL to fund its working capital requirements; funding capital expenditure required for expansion of the SI Manufacturing Facility (“Proposed Expansion”); funding working capital requirements of the Company; for purchase of plant and machinery in relation to augmenting infrastructural development at its SI Manufacturing Facility, as well as for general corporate purposes. It will be listed on BSE Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”).

In terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”) read with Regulation 31 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (the “SEBI ICDR Regulations”) and made through the book-building process in accordance with Regulation 6(1) of the SEBI ICDR; wherein not more than 50% of the Net Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers (“QIBs”, the “QIB Portion”). Further, not less than 15% of the Offer shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Offer shall be available for allocation to Retail individuals.

As per the Frost & Sullivan Report, Laxmi Organic is currently among the largest manufacturers of ethyl acetate in India with a market share of approximately 30% of the Indian ethyl acetate market. The Company believes that the diversification of its product portfolio into varied chemistries in Specialty Intermediates has enabled them to create a niche for themselves. Laxmi Organic is 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.

The Company has long-standing relationships with marquee customers like Alembic Pharmaceuticals Limited, Dr. Reddy’s Laboratories Limited, Hetero Labs Limited, Laurus Labs Limited, Macleods Pharmaceuticals Private Limited, Mylan Laboratories Limited, Neuland Laboratories Limited, Suven Pharmaceuticals, Granules India, UPL Limited, and Syngenta Asia Pacific Pte. Ltd. and Sudarshan Chemicals Industries Limited and has significantly expanded its operations and global footprint with customers in more than 30 countries, including China, the Netherlands, Russia, Singapore, the United Arab Emirates, the United Kingdom and the United States of America.

Axis Capital Limited and DAM Capital Advisors Limited (Formerly known as IDFC Securities Limited) are appointed as the Book Running Lead Managers to the Offer (“BRLMs”).

All capitalized terms used herein and not specifically defined shall have the same meaning as ascribed to them in the Red Herring Prospectus (“RHP”).

DISCLAIMERS

LAXMI ORGANIC INDUSTRIES LIMITED is proposing, subject to receipt of requisite approvals, market conditions, and other considerations, to make an initial public offer of its equity shares and has filed the RHP with the RoC and thereafter with SEBI and the Stock Exchanges. The RHP is available on the website of Securities and Exchange Board of India at www.sebi.gov.in, on the websites of the Stock Exchanges at www.bseindia.com and www.nseindia.com as well as on the websites of the BRLMs, Axis Capital Limited at www.axiscapital.co.in and DAM Capital Advisors Limited (Formerly known as IDFC Securities Limited) at www.damcapital.in, respectively. Investors should note that investment in equity shares involves a high degree of risk and for details relating to such risk, see “Risk Factors” of the RHP. Potential investors should not rely on the DRHP filed with SEBI for making any investment decision.

The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws in the United States, and unless so registered, may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. Accordingly, the Equity Shares are being offered and sold outside the United States in offshore transactions in reliance on Regulation S and applicable laws of the jurisdictions where such offers and sales are made. There will be no public offering in the United States.

DISCLAIMER CLAUSE OF SEBI: SEBI only gives its observations on the offer documents and this does not constitute approval of either the issue or the specified securities stated in the offer document. The investors are advised to refer to page 351 of the RHP for the full text of the disclaimer clause of SEBI

DISCLAIMER CLAUSE OF NSE: It is to be distinctly understood that the permission given by NSE should not in any way be deemed or construed that the offer document has been cleared or approved by NSE nor does it certify the correctness or completeness of any of the contents of the offer document. The investors are advised to refer to page 354 of the RHP for the full text of the disclaimer clause of NSE. 

DISCLAIMER CLAUSE OF BSE: It is to be distinctly understood that the permission given by BSE Limited should not in any way be deemed or construed that the offer document has been cleared or approved by BSE Limited nor does it certify the correctness or completeness of any of the contents of the of the offer document. The investors are advised to refer to the page 353 of the RHP for the full text of the disclaimer clause of the BSE Limited.

DISCLAIMER CLAUSE OF FROST & SULLIVAN: The independent market research studies “Independent Market report on India Speciality Chemical and Intermediates Market and “Utilities Supply Arrangement Benchmarking Analysis” (collectively, the “Report”) have been prepared for the proposed initial public offering of equity shares (the “Offer”) by Laxmi Organic Industries Limited (the “Company”).

These studies have been undertaken through extensive primary and secondary research, which involves discussing the status of the industry with leading market participants and experts, and compiling inputs from publicly available sources, including official publications and research reports. Estimates provided by Frost & Sullivan (India) Private Limited (“Frost & Sullivan”) and its assumptions are based on varying levels of quantitative and qualitative analyses, including industry journals, company reports and information in the public domain.

Frost & Sullivan has prepared the Report in an independent and objective manner, and it has taken all reasonable care to ensure its accuracy and completeness. Frost & Sullivan believes that the Report presents a true and fair view of the industry within the limitations of, among others, secondary statistics and primary research, but it does not purport to be exhaustive. The results that can be or are derived from these findings are based on certain assumptions and parameters/conditions. As such, a blanket, generic use of the derived results or the methodology is not encouraged.

Forecasts, estimates, predictions, and other forward-looking statements contained in the Report are inherently uncertain because of changes in factors underlying their assumptions, or events or combinations of events that cannot be reasonably foreseen. Actual results and future events could differ materially from such forecasts, estimates, predictions, or such statements.

In making any decision regarding the Offer, potential investors should conduct their own investigation and analysis of all facts and information contained in the offer documents in which extracts, in full or part, of the Report are included and must rely on their own examination of the Company and the terms of the Offer. Potential investors should not construe any of the contents of the Report as advice relating to business, financial, legal, taxation or investment matters and are advised to consult their own business, financial, legal, taxation, and other advisors concerning the Offer.

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March 09, 2021