IPO Alert: Jesons Industries files papers for an initial public offering

The global chemicals market is valued at around $5.02 trillion, with India accounting for around 4% of the market share. The sector is expected to grow at a compound annual rate of 6.2% and reach about $6.7 trillion by 2025. Meanwhile, the global adhesives market is valued at around $47 billion and is expected to hit $63 billion by 2025.

Jesons Industries recently filed preliminary papers with capital markets regulator SEBI to raise an estimated ₹800-900 crore through an initial share sale.

The IPO comprises equity shares of the face value of ₹5 each and a fresh issue of shares aggregating up to ₹120 crores, with a reservation of up to 77,000 shares for employees and an offer for sale of up to 12,157,000 shares by promoters.

The company may consider a further issue of equity shares, including a private placement aggregating up to ₹24 crores. If it is successful, the fresh issue size would be reduced.

Jesons Industries and its subsidiary Jesons Techno Polymers LLP plan to use ₹90 crores of the net proceeds towards repayment of certain borrowings. The remainder of the amount will be used for general corporate purposes.

SCE & Adhesives

Jesons Industries is one of the top manufacturers of speciality coating emulsions (SCE)) and water-based pressure-sensitive adhesives (PSA) in the tape and label segments in India. Their products are used in various end-user industries, such as paints, packaging, and chemicals for construction, textiles, leather, carpet and paper.

The Mumbai-based company is one of the leading SCE suppliers to the country’s paint sector, with about 30% market share in 2021, in terms of sales value. The company has also been an exporter of SCEs and PSAs since 2008 and has a global footprint of exports to more than 50 countries.

Jesons Industries’ top competitors include Mavom Specialty Chemicals, Interplastic, Rosber and Ribelin Sales.

Key Numbers

Jesons’ revenues from operations increased by 20.45% to ₹1,086 crores in fiscal 2021 from ₹901 crores in 2020, while its net profit jumped 213% to ₹92.88 crores from ₹29.65 crores in the previous year.

Meanwhile, seasonality may adversely affect the business and results of operations. The paint emulsion used in the decorative paints industry is sensitive to seasonality. The cold and rainy weather could have an adverse effect on the sales of emulsions used in exterior paint products.

Also, the pricing of products related to the construction and housing industry is being influenced by various factors including national and regional economic conditions.