Jesons Industries Files DRHP for Rs.900 crore IPO

Jesons Industries has filed draft red herring prospectus (DRHP) with SEBI for its proposed Rs.900 crore IPO. Jesons Industries is one of the leading manufacturers of specialty coating emulsions and water based adhesives. Jesons Industries is fully owned by the Mumbai based Gosalia family.

Out of the total capital, 86.53% is held by the main promoter, Dhiresh Gosalia. The balance 13.47% is held by individual family members including Madhavi Gosalia, Ravina Shah and Jhelum Gosalia. Jesons mainly supplies to the Indian paints sector and has nearly 30% market share in this niche space.

The IPO will comprise of a fresh issue of Rs.120 crore and an offer for sale of around 1.21 crore shares by the Gosalia family. The company is also likely to consider a pre-IPO placement of Rs.24 crore in which case the size of the IPO would be reduced proportionately. Anchor shares will be placed closer to the issue.

Depending on the eventual pricing, the indicative combined size of the IPO is expected to be Rs.800 crore on the lower side and Rs.900 crore on the upper side. The promoter stake is currently 100% and the promoter stake will get diluted due to the combined impact of the OFS and the fresh issue of shares.

Jesons Industries has a catalogue offering of more than 170 products and some of its leading brands available in the market include Bondex, Rdymix, Coviguard, Blue Glue, INDTAPE and Polytex. Jesons has been exporting its specialty coating emulsions and its water-based pressure sensitive adhesives to over 50 countries across the world.

For the fiscal year ended March 2021, Jesons Industries reported sales revenues of Rs.1,086 crore and net profits of Rs.92.88 crore offering a net profit margin of 8.55%. The profits were up 3-fold YoY while revenues were up 20% YoY even as better cost controls helped boost the bottom line. With a 30% market share, it is likely to hold margins.

The IPO will be lead managed by Axis Capital and JM Financial and the SEBI approval is expected in 2-month time frame.

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