Gem Aromatics Ltd. has filed its Draft Red Herring Prospectus with the Securities and Exchange Board of India to raise up to Rs 175 crore through an initial public offering.
The initial public offering will include a fresh issuance of equity shares worth Rs 175 crore, along with an offer-for-sale of 89.24 lakh shares by promoters and investors.
US-based doTERRA Enterprises, an investor since 2019, holds a 25% stake in the company, while the remaining 75% is owned by the promoters (the Parekh family).
Gem Aromatics is a manufacturer of specialty ingredients, including essential oils and aroma chemicals. With a strong track record and a diverse product portfolio, the company has established leadership positions in various segments of its offerings, as per its official website. Gem Aromatics serves both domestic and global customers.
The company plans to use Rs 140 crore from the fresh issue proceeds primarily for debt reduction, with the remaining funds allocated for general corporate purposes. The IPO is expected to significantly reduce the company’s debt, which stood at Rs 153.6 crore as of October 2024.
“In addition to the aforementioned Objects, our Company will receive the benefits of listing of its Equity Shares on the Stock Exchanges including enhancement of our Company’s brand name and creating a public market for our Equity Shares in India,” the company said in its DRHP
Motilal Oswal Investment Advisors has been appointed as the sole merchant banker for the issue.
Its top 10 customers include Colgate Palmolive India, doTerra Global, and Ventos Do Brasil LTDA, along with other notable clients such as Dabur India, Patanjali Ayurved, SH Kelkar, Rossari Biotech, Ventos So Brasil Eireli, and Anhui Hautian Spices Co.
Gem Aromatics has established long-standing relationships with a wide range of domestic and global corporate customers. Some of the notable names include Colgate-Palmolive (India) Limited, Dabur India Limited, Patanjali Ayurved Limited, SH Kelkar and Company Limited, Rossari Biotech Limited, Symrise Private Limited, dōTERRA, Ventos So Brasil Eireli, and Anhui Hautian Spices Co. Ltd. Additionally, the company serves several domestic and international merchant traders.
As of September 30, 2024, Gem Aromatics supplies its products to 170 customers within India and 30 customers across 13 countries globally, covering regions such as the Americas, Asia, Africa, and Australia. In the domestic market, products are sold directly to customers on a business-to-business basis. For export sales, the company uses a combination of methods, including direct sales, sales through its material subsidiary, Gem Aromatics LLC in the USA, and through third-party agencies, as disclosed in the company’s DRHP.
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