Chemspec Chemicals, Northern Arc Capital get Sebi's nod to float IPO

05:26 PM Sep 06, 2021 | PTI

Chemspec Chemicals and Northern Arc Capital have received capital markets regulator Sebi's approval to raise funds through initial share sales.

The two companies had filed their preliminary IPO papers with the Securities and Exchange Board of India (Sebi) in July.


Chemspec Chemicals and Northern Arc Capital obtained the regulator's observations on August 30 and September 3, respectively, an update with Sebi showed on Monday.


In Sebi parlance, the issuance of observations implies its go-ahead for the initial public offering (IPO).

The Rs 700-crore IPO of Chemspec Chemicals is entirely an offer for sale by promoters, according to the draft red herring prospectus (DRHP).

BACS LLP will offer shares worth Rs 233.40 crore in the offer for sale, while Mitul Vora and Rushabh Vora will each offer shares to the tune of Rs 233.30 crore Chemspec Chemicals is one of the leading manufacturers of critical additives for FMCG ingredients used in skin and hair care products and intermediates for pharmaceutical APIs used in anti-hypertension drugs.

The company's manufacture products at its production facility at Taloja, Maharashtra.

The speciality chemical maker's global distribution network in the last three financial years was spread across 43 countries in North America, Europe, the APAC region (including Japan), the Middle East and Africa.

JM Financial and Axis Capital are the lead managers to the public issue.

As per the draft papers, Northern Arc's IPO comprises a fresh issue of equity shares worth Rs 300 crore and an offer for sale of up to 36,520,585 equity shares by shareholders.

Those offering shares through an offer for sale include Leapfrog Financial Inclusion India (II) Ltd, Accion Africa-Asia Investment Company, Augusta Investments II Pte Ltd, Eight Roads Investments Mauritius II Ltd, Dvara Trust and IIFL Special Opportunities Fund.

The company may consider issuing equity shares on a private placement basis for cash consideration aggregating up to Rs 150 crore before the filing of the red herring prospectus with the registrar of companies (RoC).

Proceeds from the fresh issue would be used towards augmenting the company's capital base to meet future capital requirements.

Registered with the RBI, the company is a non-deposit taking non-banking finance company (NBFC) and operating in the financial inclusion space for over a decade.

Northern Arc is a leading player among the country's diversified NBFCs, with a business model diversified across offerings, sectors, products, geographies and borrower segments. It provides access to credit to under-served households and businesses directly and indirectly through originator partners.

Axis Capital, Credit Suisse Securities (India) Private Limited, IIFL Securities and SBI Capital Markets are the book running lead managers to the issue.

The equity shares of both the companies will be listed on the BSE and NSE.

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