Chemspec Chemicals and Northern Arc get SEBI IPO approval

SEBI has approved the IPO proposals of Chemspec Chemicals and Northern Arc Capital. Both these companies had filed the DRHP with SEBI towards the end of July. While Chemspec Chemicals is a specialty chemicals company, Northern Arc is a non-deposit taking NBFC registered with the RBI.

Chemspec has received approval for its Rs.700 crore IPO, which will entirely be an offer for sale (OFS). There will be 3 of the promoters / early investors participating in the offer for sale. The selling shareholders include Mitul Vora (Rs.233.30 crore), Rushabh Vora (Rs.233.30 crore) and Bhakchand Amoluk Consultancy LLP (Rs.233.40 crore). 

Chemspec manufactures additives that go into ingredients for manufacturing skin and haircare FMCG products. In addition, Chemspec also manufactures intermediates that go as inputs for manufacture of pharmaceutical APIs (Active Pharma Ingredients). Chemspec currently has manufacturing capacity of 6,000 tonnes per annum (TPA).

Northern Arc Capital, on the other hand, will be a combination of fresh issue and an offer for sale. The IPO will entail a fresh issue worth Rs.300 crore plus an OFS of 3.652 crore shares by the promoters and early investors. Some of the participant sellers in the OFS include Leapfrog Financial Inclusion Fund, Eight Roads Investments Mauritius, Dvara Trust and IIFL Special Opportunities Fund.

The fresh issue component of Rs.300 core will be used by Northern Arc Capital to boost its capital adequacy ratio. The CRAR is already comfortable at 28.89%, which includes Tier-I capital ratio of 27.62%. Being an NBFC, Northern Arc provides access to credit for the under-served segments. Northern Arc has an AUM (assets under management) of Rs.5,221 crore as of Mar-21. Northern Arc has a fairly widespread network across India and has presence in 657 districts spread across 28 states.

The dates for the Chemspec Chemicals IPO and the Northern Arc IPO are yet to be finalized. The IPO dates and other details like price bands will be finalized in the next couple of weeks in consultation with the lead managers.

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