Specialty chemical company, Aether Industries, which started its operations with R&D activities in Fiscal 2013 and went on to commercially launch its products in Fiscal 2017, is eyeing to raise money from the primary market as the Company has filed draft red herring prospectus (DRHP) with the capital markets regulator SEBI. The initial public offering (IPO) consists of a fresh issue of equity shares aggregating to Rs. 757 Crores, and an offer for sale of up to 2,751,000 equity shares, according to the DRHP. As per market participants, the company is expected raise Rs. 1000 Crores. The company in consultation with lead managers may also consider raising Rs. 131 Crores by issuing equity shares through a preferential offer, prior to filing of the DRHP. The Surat based company recently raised over Rs. 100 crore from White Oak Capital and IIFL in a pre-IPO round.
Aether Industries Limited is a speciality chemical manufacturer in India focused on producing advanced intermediates and speciality chemicals involving complex and differentiated chemistry and technology core competencies. Aether is one of the fastest growing specialty chemical companies in India, growing at a CAGR of nearly 60% between Fiscal 2018 and Fiscal 2021. The company's revenue from operations grew 49% to Rs. 450 Crores in Fiscal 2021 from Rs. 302 Crores in Fiscal 2020 and its net profit climbed 78% to Rs 71 Crores from Rs. 40 Crores, respectively.
Aether is led by its Promoters comprising of their Managing Director, Ashwin Desai (B. Chem. Engg, UDCT Mumbai), and Executive (Whole Time) Directors, Purnima Desai, Rohan Desai and Dr. Aman Desai (B. Tech. UDCT Mumbai, PhD Michigan State Univ. USA, ex-Dow Chemical USA), who have a combined experience of over 125 years in the chemical industry. The foundation of Aether is its in-house research and development capabilities. Their chemistry and technology core competencies and all of their products have been developed by their own R&D team, scaled up in their Pilot Plant, and launched into production employing in-house design and engineering. Aether caters to the pharmaceutical, agrochemical, material science, electronic chemical, high performance photography, and oil and gas industry segments. Currently, it has a manufacturing capacity of over 6,000 MT per annum. The same will be increased in a year's time when the Company has its new proposed green-field production site operational. Aether is the sole manufacturer in India for 7 of its products and the largest manufacturer in the world for 4 of its products; 8 of these products were 100% imported into India from China 4 years ago and now Aether is selling these products in to China.
According to the F&S Report stated in its DRHP, "Aether has been a pioneer in the Indian Specialty Chemicals market. Expertise in large range of chemistries allows Aether to support multiple end use industries. All the chemistry and technological competencies have been developed in-house which is a huge strength of Aether's R&D team. Aether is one of the largest manufacturers in India for the extremely versatile competency of tandem Grignard and ethylene oxide chemistry. Aether is also one of the few companies in the specialty chemicals sector who has deployed continuous reaction technology as a core technology competency at all stages (R&D, Pilot Plant and large scale manufacturing). Based on the technical expertise Aether has developed over the years, the company is able to carry out innovative processes at global scale, which are difficult to replicate, and create significant barriers for new entrants. Aether has a strategically curated product portfolio benefitting from both import substitution as well as China+1 tailwind, hence expected to grow in both volume and value terms."
HDFC Bank Limited and Kotak Mahindra Capital Company Limited are the book running lead managers to the issue.