Supreet Chemicals files DRHP

Supreet Chemicals files DRHP

Gujarat-based specialty chemical company Supreet Chemicals has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on September 5, 2025. The company aims to raise Rs 499 crore through an initial public offering (IPO) of equity shares. The IPO comprises a fresh issue with no offer-for-sale component, meaning the entire proceeds will go directly to the company.

The IPO will be led by IIFL Capital Services as the sole book-running lead manager, with MUFG Intime India appointed as the registrar. The shares are planned to list on both the BSE and NSE following regulatory approvals and completion of the book build process.

The primary objective of the IPO is to fund Supreet Chemicals' proposed greenfield manufacturing facility in Vapi, referred to as Manufacturing Facility 4. The company intends to allocate approximately Rs 310 crore for this project. Additionally, Rs 65 crore will be used for repaying or prepaying certain outstanding borrowings, which stood at Rs 203.5 crore as of July 2025. The remaining funds will be utilized for general corporate purposes.

Supreet Chemicals' financial performance in the fiscal year 2025 showed a significant improvement. Revenue increased by 51.2% to Rs 362.5 crore, while profit after tax more than doubled to Rs 51.9 crore. However, the company faced a decline in FY24, with a 54.6% drop in profit and a 23.3% decrease in revenue.

The company specializes in manufacturing specialty chemical intermediates, including MCA, sulphonamides, and NAPSA, catering to industries such as textiles, pharmaceuticals, performance chemicals, personal care, and agrochemicals. It is also a key supplier of SAMBA, a complex molecule manufactured through 15 multi-step unit operations.

Key risks and watchpoints for the company include manufacturing concentration, raw material price volatility, customer and supplier concentration, and execution risks related to capacity expansion and product diversification. Management aims to mitigate these risks through disciplined execution and balance sheet strengthening.

Supreet Chemicals' IPO is expected to provide the company with the necessary funds to expand its operations, strengthen its balance sheet, and continue its growth trajectory in the specialty chemical intermediates market.

References:
[1] https://www.moneycontrol.com/news/business/ipo/supreet-chemicals-to-tap-capital-markets-for-rs-499-crore-fund-raise-files-ipo-papers-13525002.html
[2] https://hdfcsky.com/news/supreet-chemicals-to-raise-rs-499-crore-via-ipo-to-fund-vapi-greenfield-capex