There are some interesting IPOs scheduled to be launched in 2021. One such IPO is the Laxmi Organic Industries Limited IPO that is being launched on March 15, 2021. Here is all you need to know about the issue.
IPO Date | March 15, 2021 to March 17, 2021 |
Issue Type | Book Built Issue IPO |
Issue Size | Equity Shares of Rs.2 totaling up to Rs.600 Crore |
Fresh Issue | Equity Shares of Rs.2 totaling up to Rs.300 Crore |
Offer for Sale | Equity Shares of Rs.2 totaling up to Rs.300 Crore |
Face Value | Rs.2 per equity share |
IPO Price | Rs.129 to Rs.130 per equity share |
Market Lot | 115 shares |
Min Order Quantity | 115 shares |
Listing At | BSE, NSE |
Companies | Type | Bidding Dates | |
Regular | Closes Today | ||
SME | Closes 30 Dec | ||
SME | Opens 27 Dec | ||
Regular | - | ||
Regular | - |
Bid/Offer Launch date | March 15, 2021 |
Bid/Offer Last date | March 17, 2021 |
Basis of Allotment finalization date | March 22, 2021 |
Initiation of Refunds | March 23, 2021 |
Credit of Shares to Demat Acct | March 24, 2021 |
IPO Shares Listing Date | March 25, 2021 |
Laxmi Organic Industries Limited is a leading manufacturer of Acetyl Intermediates and Specialty Intermediates with almost three decades of experience in the large-scale manufacturing of chemicals. The company is one of the largest manufacturers of ethyl acetate in India with a market share of approximately 30% of the Indian ethyl acetate market. Laxmi Organic’s products are divided into two broad categories:
The products offered by Laxmi Organic find application in various high-growth industries, including pharmaceuticals, agrochemicals, dyes & pigments, inks & coatings, paints, printing & packaging, flavors & fragrances, adhesives, and other industrial applications.
Currently, the company has two manufacturing facilities and two distilleries in Maharashtra. It also has two research and development facilities with state-of-the-art research and development infrastructure to synthesize specialty molecules and advanced intermediates, recognized by the Department of Scientific and Industrial Research (DSIR), Government of India.
Laxmi Organic Industries Limited was incorporated in 1989. In 1992, the company commissioned the Acetyl Intermediates Manufacturing facility at Raigad, Maharashtra for manufacturing glacial acetic acid.
By 1996, it had started the production of ethyl acetate too. In 2004, Laxmi Organic installed two windmills at Chitradurga district, Karnataka with capacities of 0.6 MW each. It also received ISO 9001-2000 certifications for the manufacture and marketing of ethyl acetate, acetic acid, and absolute alcohol.
Two years later, the company installed a windmill at Ghatnandre, Sangli, Maharashtra, with a capacity of 1.25 MW. By 2008, Laxmi Organic set up a distillery at Jarandeshwar and boosted its ethyl acetate manufacturing capacity to 51,000MT. In 2010, the company received ISO 14001:2009 and OHSAS 18001:2007 certifications for the manufacture and marketing of ethyl acetate, acetic acid and its derivatives, acetaldehyde, and absolute alcohol.
It also acquired Clariant’s ketene/diketene business and expanded into diketene and diketene derivatives products by commissioning the SI Manufacturing Facility. By the next year, the company set up a DSIR-approved R&D center at its SI Manufacturing facility and increased its diketene and diketene derivatives manufacturing capacity to 13,380MT and ethyl acetate’s capacity to 120,750MT.
In 2013, the company incorporated its subsidiaries Laxmi Organic (Europe) B.V., in Netherlands, Europe, and Laxmi Petrochem Middle East FZE in Sharjah.
Here is a quick look at the financial performance of Laxmi Organic Industries Limited over the last four years:
Mar 2020 | Mar 2019 | Mar 2018 | Mar 2017 | |
Total Assets | 1024.25 | 957.66 | 842.13 | 614.79 |
Total Income | 1366.28 | 1434.98 | 1290.59 | 1076.52 |
Total Expenses | 1301.56 | 1332.10 | 1177.17 | 995.87 |
Profit After Tax | 78.62 | 77.79 | 76.73 | 70.78 |
All amounts in INR Crore
A quick glance at the financial performance of Laxmi Organic over the last three years offers the following insights:
The chemicals market in India is valued at USD166 billion. This is around 4% of the global chemicals industry. This is expected to grow at a CAGR of around 12% and reach ~USD280-300 billion within the next five years. The specialty chemicals industry forms around 47% of the Indian chemical industry and is expected to grow at a CAGR of around 11-12% over the same period.
If we look at the global acetyl industry was valued at USD13.4 billion in 2019 and is expected to reach USD18.3 billion by 2024 – a CAGR of around 6.4%. In India, this industry was valued at USD1.5 billion in 2019 and is expected to grow at a CAGR of around 6.6% and reach USD2.1 billion by 2024.
The global specialty intermediaries industry was valued at USD115billion in 2019 and is expected to grow at a CAGR of 5.2% and reach USD148 billion by 2024. In India, this industry was valued at USD6.6 billion in 2019 and is expected to grow at a CAGR of 10.2% and reach USD10.8 billion by 2024.
Here is a quick look at the performance of Laxmi Organic in comparison to its peers on some key aspects for FY 2020:
Profit After Tax | Debt to Equity Ratio | Return on Net Worth (RoNW) | |
Laxmi Organic Industries Limited | 78.62 | 0.22% | 16.45% |
Aarti Industries Limited | 546.76 | 0.68% | 18.5% |
Atul Limited | 640.17 | – | 22.38% |
Fine Organic Industries Limited | 169.86 | 0.14% | 26.4% |
Navin Flourine International Limited | 399.82 | – | 33% |
SRF Limited | 974.18 | 0.52% | 20.80% |
Rossari Biotech Limited | 65.25 | 0.24% | 31.79 |
All amounts in INR Crore
As you can see, compared to its listed peers, Laxmi Organic has a slightly lower Debt to Equity Ratio as compared to its peers. However, its RoNW ratio is also lower. If the company can leverage its position as a market leader in the ethyl acetate segment, then it might be able to boost its financial performance.
Let’s look at the valuation factors of Laxmi Organic in comparison with its peers:
Earnings Per Share | P/E Ratio | |
Laxmi Organic Industries Limited | 16.06 | – |
Aarti Industries Limited | 30.77 | 24.92 |
Atul Limited | 215.82 | 18.48 |
Fine Organic Industries Limited | 54.31 | 34.84 |
Navin Flourine International Limited | 80.83 | 15.00 |
SRF Limited | 169.48 | 16.42 |
Rossari Biotech Limited | 13.28 | – |
As per the peer group selected by Laxmi Organic in the RHP, the average PE Ratio is 21.93. If we look at the price band of Laxmi Organic IPO and calculate the P/E Ratio at the higher price of Rs.130, then we get a value of P/E Ratio of 8.09. This is way lower than the industry average. Therefore, the IPO is undervalued.
Laxmi Organic Industries Limited proposes to utilize the net proceeds from the issue for:
You can apply for the Laxmi Organic Industries Limited IPO by using one of these two methods of payment:
Here are some things that you need to keep in mind before investing in the Laxmi Organic IPO:
Q1. What is the Laxmi Organic Industries Limited IPO?
The Laxmi Organic Industries Limited IPO is a Main Board IPO for the issue of equity shares having the face value of Rs.2 totaling up to Rs.600 crores. The registrar for the IPO is Link Intime India Private Limited and the shares are proposed to be listed on the BSE and NSE.
The Laxmi Organic Industries Limited IPO opens on March 15, 2021, and closes on March 17, 2021.
The lot size of the Laxmi Organic IPO is 115 shares. Also, the minimum order quantity is 115 shares.
According to the RHP, the basis of allotment will be finalized by March 22, 2021. Further, investors can expect to receive the credits in their demat accounts by March 24, 2021 and may be listed on March 25.
Happy Investing!