Aether Industries Limited was established in 2013; it manufactures specialty chemicals and API’s. The company produces various chemicals such as 4MEP, MMBC, T2E, OTBN, and Bifenthrin Alcohol. The company has three major business verticals. Let’s delve deep into understanding some key elements about the Aether Industries IPO.
- Large-scale manufacturing in API and specialty chemicals.
- CRAMS is also known as contract research and manufacturing services
- Contract manufacturing.
The company has two manufacturing plants. It is located in Surat, Gujarat. The company can carry out manufacturing in 16 production streams. The capacity of the plants is 6,096 MT per year. Aether Industries Limited has a diversified product portfolio of 25 products. It has a market base in 18 countries. Aether Industries Limited also has a synergy with 34 global companies. The company holds a creative approach. It has formulated a mix of chemistry, technology, and systems. It has helped the business growth of the company.
OBJECTS OF THE AETHER INDUSTRIES IPO ISSUE:
- Prepayment of all the loans of the company. It will be done on a consolidated basis.
- To meet corporate targets.
- To fund the working capital requirement.
- Aether Industries Limited also has an objective to fund its CAPEX Plan. The company wants to expand its existing manufacturing unit capacity. It also intends to develop new facilities. Aether Industries Limited intends to carry out a technology upgradation.
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BASIS OF THE AETHER INDUSTRIES IPO OFFER:
The basis of the IPO offer is as follows:
- Aether Industries Limited is a market leader company in its product segment.
- The company has a huge emphasis on R&D., and It has helped it capitalize on its technology and chemical manufacturing.
- Aether Industries Limited has a long-standing relationship with consumers. It has a differentiated client base.
- Aether Industries Limited has a Large-scale manufacturing capacity. It also holds CRAMS and contract manufacturing.
- Aether Industries Limited strictly follows guidelines for its QEHS operations. It also helped the company’s business operation to attain better profitability.
- The company has a solid financial performance.
- Aether Industries Limited has a team of experts in all segments. The company also has a strong promoter.
AETHER INDUSTRIES IPO DETAILS:
Aether Industries Limited is a company with its headquarters in Surat. The company recently got approval from SEBI. It earlier filed its DRHP for approval. The company is coming up with its IPO offer. The IPO offer of the company is Rs. 808.04 crores. It is a mix of an OFS offer of Rs. 181.04 crores. It corresponds to 2,820,000 equity shares of the company. It also contains an issue of fresh equity worth Rs. 627.00 crores by the company.
The company stated that it would utilize funds as below:
| Repayment and pre-payment of the borrowings of the company | Rs. 137.90 crores |
| Working capital | Rs. 165.00 crores |
| CAPEX Plan | Rs. 163.00 crores |
| General corporate purpose | Remaining funds |
The company fixed the price band to Rs. 610.00 – Rs. 642.00 per equity share. Post allotment, the company’s shares will be listed on BSE and NSE. The IPO issue offer constitutes 10.11 % of the company’s post-issue fully paid-up equity capital base. The company also completed its Pre – IPO allotment round. In it, the company allotted equity shares of the company.
It was allotted at Rs. 610.00 per share. It was done to raise Rs. 130.00 crores funding. It reduced the IPO fresh equity offer to Rs. 627.00 crores. Post IPO offer, the fully paid-up equity capital of the company will increase. It will increase from Rs. 114.72 crores to Rs. 124.48 crores. On the upper band of IPO, the company’s market share will be Rs. 7991.79 crores.
| IPO Opening Date | May 24, 2022 |
| IPO Closing Date | May 26, 2022 |
| Issue Type | Book Building Type Issue IPO |
| Face Value | Rs.10 per Equity share |
| IPO Price Band | Rs. 610 – Rs. 642 per equity share |
| Market Lot | One lot of 350 equity shares of the company |
| Minimum Order Quantity | One lot corresponding to 23 equity shares of the company |
| Minimum Order Price | Rs. 14,766 |
| Maximum Order Quantity | 13 lots corresponding to 299 equity shares of the company |
| Maximum Order Price | Rs. 191,958 |
| Listing At | BSE, NSE |
| Issue Size | 12,586,352 Equity shares of the company, which corresponds to Rs. 808.04 crores |
| Fresh Issue | 9,766,352 Equity shares of the company, which corresponds to Rs. 627.00 crores |
| Offer for Sale | 2,820,000 Equity shares of the company, which corresponds to Rs. 181.04 Crores |
| Price Band Announcement: | May 19, 2022 |
| Anchor Investors Allotment: | May 23, 2022 |
| Basis of Allotment Date | May 31, 2022 |
| Initiation of Refunds | June 01, 2022 |
| The Credit of Shares to Demat Account | June 02, 2022 |
| IPO Listing Date | June 03, 2022 |
| Basis of the Allotment Type | % Of IPO Offer |
| Qualified Institutional Buyer | 50 |
| Non-Institutional Investor | 15 |
| Retail | 35 |
Also Read : List of Mainboard IPO’s in India.
Also Read : List of Upcoming SME IPO’s in India.
STRENGTHS AND OPPORTUNITIES OF AETHER INDUSTRIES IPO:
- Aether Industries Limited has an established market position. The company has maintained a strong relationship with global and domestic clients. Some clients are Neogen Chemicals, Moehs Catalana, Divi’s Lab, and Aarti Drugs.
- The company is the global leader in the manufacturing of 4MEP. It is on both terms, volume and production. It is also the only manufacturer of 4MEP in India. The company is also the largest manufacturer of NODG and T2E globally.
- Aether Industries Limited has a diversified product portfolio. The company holds a leadership position in sustainable chemistry.
- The company follows its core principle of manufacturing design engineering. It has made the company turned into a reputed firm.
- Aether Industries limited has a strong global as well as domestic presence.
- The company has a great In-house R&D team. It has helped the company to formulate and manufacture chemicals and API’s.
- Aether Industries Limited has a diversified product portfolio. The products of the company have been used in the diversified sector. It includes pharmaceutical, electronic chemical, material science, fine/specialty chemical, and agrochemical industry. It has led to large revenue growth for the company.
- Aether Industries Limited is the only large-scale manufacturer of some of the products in India.
- Aether Industries Limited has a comfortable financial risk profile. The company has recorded solid financial performance in the past. The company is a steady and healthy accretion to reserves. It has a comfortable capital structure.
- The company has healthy profitability. The debt-protection matrix of the company is comfortable. The company will take a CAPEX of around 90-100 crore in FY2022 and FY2023. It signifies the strong demand and outlook of the company.
- Aether Industries will get benefit from the PLI scheme. It will also benefit from the growth projection of the specialty chemical sector.
WEAKNESSES AND THREATS OF AETHER INDUSTRIES IPO:
- Aether Industries needs to follow strict quality and operational requirements. The company is under regular audits and inspections.
- The specialty chemical sector has very stiff competition. The company needs to follow and execute its plans properly. Any wrong decision and wrong operation execution can lead to a significant loss to the company.
- Aether Industries is vulnerable to the prices of raw materials. It is also vulnerable to supply chain demand and network and shipping costs. It is vulnerable to forex rate fluctuation.
- The company relies heavily on its In-house R&D. Any inefficiency in it can significantly impact its financial matrix.
- As the company has no long-term contact with any customers, any termination or dis-attachment from the company will affect it adversely.
- The dependency to earn revenue is limited to certain products.
- Aether Industries has a huge working capital requirement. It has led the company to maintain a high inventory.
- The major threat to the company is the susceptibility to their project implementation. It can be a serious issue if there are any stabilization risks.
- The company doesn’t have a long-term contract with its key clients.
- Any Non-compliance with regulatory requirements can lead to serious harm to the company’s reputation.
- The company is currently facing a trial under legal procedures. It is on the promoters, board of directors, and their group company.
FINANCIAL TRENDS OF AETHER INDUSTRIES IPO:
| Particulars | For the year ending with the amount as in Rs. in Million | ||||
| 31 Dec 21 | 31 Dec 20 | 31 Mar 21 | 31 Mar 20 | 31 Mar 19 | |
| Total Assets | 7,095.61 | 4,000.95 | 4,529.44 | 3,004.67 | 2,066.75 |
| Total Revenue | 4,493.15 | 3,373.41 | 4,537.89 | 3,037.81 | 2,032.77 |
| Profit After Tax | 829.06 | 482.54 | 711.19 | 399.56 | 233.35 |
| PARAMETER | MARCH 21 | MARCH 20 | YoY % |
| Earnings Per Share (Rs) | 70.42 | 46.68 | 50.87 |
| CEPS (Rs) | 7.39 | 5.08 | 45.62 |
| DPS (Rs) | 0.00 | 0.00 | 0.00 |
| Book NAV/Share (Rs) | 172.62 | 91.45 | 88.77 |
| Tax Rate (%) | 24.19 | 29.29 | -17.43 |
| Core EBITDA Margin (%) | 24.91 | 23.77 | 4.80 |
| EBIT Margin (%) | 23.35 | 21.82 | 6.98 |
| Pre-Tax Margin (%) | 20.84 | 18.72 | 11.31 |
| PAT Margin (%) | 15.80 | 13.24 | 19.34 |
| Cash Profit Margin (%) | 18.24 | 15.84 | 15.19 |
| ROA (%) | 18.88 | 15.76 | 19.81 |
| ROE (%) | 56.31 | 68.40 | -17.69 |
| ROCE (%) | 33.30 | 31.87 | 4.49 |
| Asset Turnover (x) | 1.20 | 1.19 | 0.39 |
| Sales/Fixed Asset (x) | 2.26 | 2.24 | 1.00 |
| Working Capital/Sales (x) | 6.29 | 10.09 | -37.67 |
| Fixed Capital/Sales (x) | 0.44 | 0.45 | -0.99 |
| Receivable days | 69.40 | 67.20 | 3.27 |
| Inventory Days | 63.50 | 67.57 | -6.02 |
| Payable days | 73.16 | 76.21 | -4.00 |
| EV/Net Sales (x) | 0.47 | 0.58 | -18.65 |
| EV/Core EBITDA (x) | 1.83 | 2.38 | -23.02 |
| EV/EBIT (x) | 2.02 | 2.66 | -24.01 |
| EV/CE (x) | 0.47 | 0.58 | -19.57 |
| Net Sales Growth (%) | 49.04 | 50.02 | -1.95 |
| Core EBITDA Growth (%) | 57.51 | 48.64 | 18.23 |
| EBIT Growth (%) | 59.56 | 52.52 | 13.40 |
| PAT Growth (%) | 77.99 | 71.23 | 9.50 |
| EPS Growth (%) | 50.87 | 71.23 | -28.58 |
| Total Debt/Equity (x) | 1.19 | 2.18 | -45.17 |
| Current Ratio (x) | 1.44 | 1.25 | 15.02 |
| Quick Ratio (x) | 0.92 | 0.64 | 42.80 |
| Interest Cover (x) | 9.29 | 7.03 | 32.21 |
COMPARISON WITH PEERS OF AETHER INDUSTRIES IPO:
| Name of the Company | EPS of the company as in Rs. | PE ratio | PAT of the company as in Rs. in crores | Market cap of the company as in Rs. in crores |
| Aether Industries Limited | 9 | 72 | 109 | 7704 |
| Clean Science and Technology Limited | 27.54 | 62.2 | 292 | 18242 |
| Navin Fluorine International Limited | 53.09 | 71 | 263 | 18676 |
| Vinati Organics Limited | 33.73 | 62.2 | 347 | 21561 |
| PI Industries Limited | 55.62 | 47.5 | 844 | 40058 |
AETHER INDUSTRIES LIMITED PROMOTERS:
The promoters of the company are as follows:
- Ashwin Jayantilal Desai
- Purnima Ashwin Desai
- Rohan Ashwin Desai
- Dr. Aman Ashvin Desai
- ADJ Family Trust
- PAD Family Trust
- RAD Family Trust
- AAD Family Trust
- AAD Business Trust
| Pre-Issue Share Holding | 96.96% |
| Post Issue Share Holding | 87.09% |
COMPANY ADDRESS:
Aether Industries Limited
Plot No. 8203, GIDC, Sachin,
Surat – 394230, Gujarat
Tel: +91 261 660 3360
Contact Person: Chitrarth Rajan Parghi
Company Secretary and Compliance Officer
E-mail: compliance@aether.co.in
Website: www.aether.co.in
AETHER INDUSTRIES IPO REGISTRAR:
Link Intime India Private Limited
C 101, 1st Floor, 247 Park
L.B.S. Marg,
Vikhroli (West), Mumbai 400 083
Maharashtra, India
Telephone: +91 22 4918 6200
E-mail: aether.ipo@linkintime.co.in
Website: www.linkintime.co.in
AETHER INDUSTRIES IPO LEAD MANAGERS
- HDFC Bank Limited
- Kotak Mahindra Capital Company Limited
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