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S H Kelkar’s Rs 500 Cr IPO To Open On October 28

Monday, October 26, 2015
By Dominic Rebello

Fragrance and flavour maker S H Kelkar & Company plans to raise Rs 500 crore from its initial public offering (IPO) which will open on October 28. The company, which is one of the largest fragrances and flavour companies in India by revenue has set the price band at Rs 173-180 per equity share. The issue will close on October 30 and the shares are proposed to be listed on the National Stock Exchange of India Ltd and Bombay Stock Exchange Ltd.

The products produced by the company are used as a raw material by producers of baked goods, dairy products, beverages and pharmaceutical products. The company has over 300 customers for its flavour products.

Through the issue the company proposes to raise Rs 210 crore by issuing fresh shares, while US-based Pvt. equity firm Blackstone will mobilise Rs 290 crore by offloading its 10% stake in the company.

The Blackstone Group had invested in S H Kelkar in 2012 and presently holds 33.28% shareholding of the company. The company proposes to use the issue proceeds for repayment/pre-payment in full or in part of certain loans availed by the company, Investment in their wholly owned subsidiary K.V. Arochem Pvt. Ltd and general corporate purposes.

“We have around Rs 170 crore debt in the company today and with the proceeds of the IPO, we will pare down all the debt. We will be almost a zero debt company after the IPO,” said Kedar Vaze, Group CEO, S H Kelkar & Company.

S H Kelkar has four manufacturing facilities, three of which are located in India (Mumbai, Vapi and Raigad) and one in the Netherlands. The firm's fragrance products and ingredients are used as raw material in personal wash, fabric care, skin and hair care, fine fragrances and household products. Its flavour products are used as raw material by producers of baked goods, dairy products, beverages and pharmaceutical products.

The IPO is being managed by JM Financial and Kotak Mahindra Capital Company.

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