Supreet Chemicals to Raise ₹499 Crore via IPO to Fund Vapi Greenfield Capex and Pare Debt

Mumbai, September 5, 2025: Supreet Chemicals Limited (unlisted) has filed its draft prospectus for its IPO. The IPO is a 100% fresh issue of equity shares totalling up to ₹499.00 crore, with no offer for sale. IIFL Capital is appointed as the book-running lead manager, while MUFG Intime India is appointed as the registrar. The company plans to list the shares on both BSE and NSE.

Supreet Chemicals Limited is a specialty chemical intermediates manufacturer with expertise in 15+ complex chemistries and multi-step unit operations, supplying to textiles, pharmaceuticals, performance chemicals, personal care and agro-chemicals. The company plans to list its equity shares on BSE and NSE following regulatory approvals and completion of the book build.

Issue Snapshot

The issue is made up of a completely fresh issue of up to ₹499.00 crore with zero offer for sale (Offer for Sale). The pre-IPO placement (possible) limit is up to ₹99.00 crore. If undertaken, it will be adjusted against the fresh issue size. The proceeds from the issue will be allocated to three major purposes: ₹ 310.00 million for capex in manufacturing facility 4 (Vapi), ₹ 65.00 million for repayment or prepayment of certain borrowings, and the remainder for general corporate purposes.

Objects of the Issue and Utilisation of Net Proceeds

The net proceeds from the fresh issue will be utilised for several key purposes. Approximately ₹3,100 million is planned to finance the capital expenditure requirements for the company’s Manufacturing Facility 4, referred to as the “Proposed Greenfield Project.” Around ₹650 million will be allocated for repayment or prepayment, in full or in part, of certain outstanding borrowings availed by the company. The remaining portion of the proceeds will be used for general corporate purposes.

Financial Highlights (Restated, Ind AS)

The company reported a sharp rebound in FY25, with revenue rising to over ₹360 crore after a subdued FY24. Profit after tax more than doubled compared to the previous year, supported by better operating leverage. Net worth also strengthened steadily, while borrowings expanded as the company funded growth. Export sales formed about a quarter of total revenue, showing a strong global demand base.

Other Operating Details

Operationally, capacity utilisation improved to nearly three-fourths in FY25, up from close to 60% two years earlier. The company continues to focus on specialty chemical intermediates spanning aromatic amines, sulphonamides, amino phenols, and other niche segments catering to textiles, pharmaceuticals, personal care, and agrochemicals.

Key Risks and Watchpoints

Management intends to nearly double capacity, deepen exports, and broaden product families with higher-margin intermediates. IPO proceeds targeted at capex and deleveraging are expected to support execution discipline and balance sheet strength ahead of commissioning. A few key risks and watchpoints need to be considered while assessing the company’s growth and expansion plans:

• Manufacturing Concentration: All plants are located in a single region, which makes the company vulnerable to local disruptions. Any environmental regulation, policy shift, or regional issue could directly affect operations and continuity.

• Dependence: Raw materials are exposed to price volatility and regulatory oversight. Sharp cost increases or import restrictions may pressure margins, particularly in products with less pricing flexibility.

• Customer and Supplier Concentration: A limited set of large customers and key suppliers creates dependency. Any shift in demand, contract renegotiation, or supply disruption may significantly influence revenue flow and production stability.

• Execution Risk on Extension: The company’s plan to add capacity and diversify product families depends on timely project delivery. Delays or budget overruns could push back revenue benefits and strain the balance sheet despite IPO funding support.

Supreet Chemicals’ proposed IPO aims to raise ₹499 crore to fund its Vapi greenfield project, repay certain borrowings, and support general corporate purposes. With a strong FY25 performance and a focus on specialty chemical intermediates, the company plans to expand capacity, diversify products, and strengthen its balance sheet while remaining mindful of operational, raw material, and execution risks.

REF: https://www.bseindia.com/corporates/download/381273/IPO Prior/SupreetChemicalsLimitedDRHP_20250905160106.pdf

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