Safex Chemicals (India) Ltd., a prominent player in India’s specialty chemicals and agrochemical industry, has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), seeking approval for an initial public offering (IPO). The IPO comprises a fresh issue of shares worth Rs. 450 crore and an offer for sale (OFS) of 35.73 million equity shares by promoters and investors. The funds will primarily be allocated toward debt reduction and general corporate purposes. The IPO move reflects Safex’s ongoing expansion strategy, strong financial performance, and growing global footprint across 22 countries.
IPO Breakdown: A Dual-Pronged Fundraising Strategy
Safex Chemicals’ proposed public issue is structured to serve both capital infusion and investor exit objectives. The IPO comprises:
- Fresh Issue: Rs. 450 crore to be raised by issuing new shares
- Offer for Sale (OFS): 35,734,818 equity shares to be offloaded by existing shareholders, including private equity investor ChrysCapital
To optimize its capital structure ahead of listing, Safex has indicated the possibility of a Rs. 90 crore pre-IPO placement. Should this materialize, the fresh issue size would be adjusted accordingly.
A significant portion of the net proceeds will be used to repay outstanding borrowings, thereby improving the company’s leverage position. The remaining capital will be directed toward general corporate requirements, supporting strategic initiatives and operational flexibility.
Shareholding and Private Equity Exit
Private equity firm ChrysCapital, which invested in Safex Chemicals across two tranches in March 2021 and September 2022, currently owns 44.80% of the company’s equity. The OFS structure offers ChrysCapital and other early investors an opportunity to partially monetize their stakes, signaling confidence in Safex’s ability to attract new institutional investors in the public market.
While the specifics of promoter dilution were not disclosed, the IPO is expected to broaden the shareholder base and improve transparency, positioning the company for long-term capital market engagement.
A Diversified Business Model Anchored in Agri-Sciences
Safex Chemicals was incorporated in 1991 and operates through three well-defined verticals:
- Branded Formulations: Products aimed at enhancing farm productivity and crop protection
- Specialty Chemicals: High-value, customized chemical products for industrial applications
- Contract Development and Manufacturing Organization (CDMO): Providing R&D and manufacturing services to global clients
This business model has allowed the company to serve both B2B and B2C segments, offering scalability, margin diversity, and insulation against sectoral cyclicality. The CDMO vertical, in particular, positions Safex as a partner of choice for international players looking to outsource complex chemical manufacturing.
Strategic Acquisitions Fueling Global Expansion
Over the last few years, Safex has pursued a deliberate acquisition strategy to diversify its portfolio and extend its geographic reach. Key acquisitions include:
- Shogun Lifesciences (India) – July 2021
- Shogun Organics (India) – September 2021
- Briar Chemicals (UK) – October 2022
The acquisition of Briar Chemicals, a CDMO based in the United Kingdom, marked Safex’s entry into European markets and added international manufacturing capabilities to its portfolio. This move not only boosts global revenue streams but also enhances its compliance standing with international regulatory agencies—an important factor for sustained exports.
As of March 31, 2025, the company’s operations spanned 22 countries, supported by eight manufacturing units (seven in India and one in the UK).
Strong Revenue Momentum and Financial Stability
Safex Chemicals has demonstrated solid financial performance in recent years. In FY 2024-25, the company reported Rs. 1,584.78 crore in operating revenue, reflecting a 12.83% year-on-year increase from Rs. 1,404.59 crore in the previous fiscal.
This growth has been driven by both domestic demand for crop protection products and rising exports in the specialty chemicals segment. The combination of organic growth and acquisition-led scale-up suggests that the company is now better positioned to manage working capital efficiently and invest in innovation and sustainability.
IPO Lead Managers and Listing Plans
The IPO is being managed by a consortium of seasoned investment bankers, including:
- Axis Capital
- JM Financial
- SBI Capital Markets
The company plans to list its equity shares on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
Given investor appetite for specialty chemical firms with strong fundamentals and export potential, Safex’s IPO is likely to generate significant institutional interest, particularly from long-only funds focused on manufacturing, chemicals, and agri-input sectors.
Conclusion: A Pivotal Step Toward Scale and Global Integration
Safex Chemicals’ IPO filing is a strategic leap toward achieving its long-term vision of becoming a globally integrated specialty chemicals and agro-sciences company. With a resilient business model, expanding international footprint, and a robust revenue track record, the company stands at a critical inflection point.
By leveraging public capital markets, Safex aims to strengthen its financial foundation, improve corporate governance, and accelerate its journey into global markets. For investors seeking exposure to India’s industrial resurgence and chemical manufacturing excellence, this offering presents a compelling opportunity.
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