Safex Chemicals Plans ₹450 Cr IPO to Strengthen Financial Health and Growth
Agrochemical specialist Safex Chemicals prepares for ₹450 crore public issue to strengthen balance sheet, reduce borrowings, and support business expansion.
Safex Chemicals Eyes Capital Markets with ₹450 Crore IPO Plan
Safex Chemicals, a producer in the specialty chemicals space, is preparing to roll out its maiden public share sale, aiming to generate approximately ₹450 crore in capital. The company has formally submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI), signaling its intention to go public in the near term.
The IPO consists of a fresh issue of shares worth ₹450 crore alongside an Offer for Sale (OFS) of up to 3,57,34,818 equity shares, allowing existing shareholders to partially offload their holdings. A reserved portion of the offering has also been allocated for eligible employees, ensuring broader participation within the organization.
Offer Structure and Allotment Criteria
The public issue will follow a book-building process, a common approach in IPOs where demand determines the final price. According to the DRHP, the distribution of the offer will follow these norms:
• A maximum of half the offering is earmarked for allocation to qualified institutional investors (QIBs).
• At least 15% will go to non-institutional investors (NIIs)
• At least 35% of the total issue is designated for individual retail participants.
This allocation ensures that a healthy balance of institutional, high-net-worth, and retail investors can take part in the offering, promoting market diversity and liquidity.
Utilization of IPO Proceeds
Safex Chemicals plans to utilize the capital raised from the fresh issue primarily for debt reduction and operational needs. Below is a detailed division of the primary fund utilization segments:
• ₹255.59 crore is earmarked for repayment or prepayment of outstanding borrowings
• An amount of ₹110 crore is planned to be directed toward clearing outstanding borrowings incurred by its subsidiary, Shogun Organics.
• The remaining funds will go toward general corporate expenses, providing financial flexibility for future strategic initiatives
This reallocation of capital is expected to improve the company’s debt-to-equity ratio and free up internal resources for core business growth.
Company Background: Legacy in Agrochemical Innovation
Established in 1991, Safex Chemicals has grown into a well-recognized player within India’s agrochemical and specialty chemicals landscape. The company focuses on delivering solutions in three major verticals:
• Branded formulations
• Specialty chemical products
• Contract development and manufacturing (CDMO)
Its diverse offerings are tailored to the needs of Indian farmers and international agrochemical firms. Safex has steadily built its reputation for delivering innovative and effective chemical solutions that support modern agriculture and crop protection.
Financial Performance: Revenue Growth Amid Bottom-Line Pressure
Despite experiencing net losses in recent years, Safex Chemicals has recorded robust revenue growth, highlighting the strength of its operational model. A quick overview of the company’s latest financial metrics is outlined below:
Revenue Growth (Consolidated):
• FY23: ₹1,161.02 crore
• FY24: ₹1,404.59 crore
• FY25: ₹1,584.78 crore
Net Profit/Loss (Consolidated):
• FY23: ₹(1.02) crore
• FY24: ₹(22.79) crore
• FY25: ₹(14.29) crore
EBITDA and Margins:
• FY23: ₹149.06 crore (EBITDA margin: 12.84%)
• FY24: ₹118.65 crore (EBITDA margin: 8.45%)
• FY25: ₹233.03 crore (EBITDA margin: 14.70%)
These figures suggest that although profitability has faced headwinds, particularly in FY24, the company has rebounded significantly in FY25 in terms of operational efficiency, as reflected by the improved EBITDA margin.
Growth Strategy and Market Outlook
Safex Chemicals’ IPO move comes at a time when India’s agrochemical and specialty chemical industries are poised for long-term expansion, driven by increasing agricultural needs, global export demand, and regulatory tailwinds for domestic manufacturing.
The company’s decision to clear a substantial portion of its debt signals a strategic shift toward financial consolidation and operational scalability. Additionally, Safex’s involvement in contract development and manufacturing (CDMO) opens avenues for B2B partnerships with global players, potentially enhancing revenue diversity and margin resilience.
With IPO proceeds providing a stronger financial foundation, Safex is expected to channel investments into R&D, production enhancements, and market outreach—further solidifying its competitive edge.
Final Thoughts
Safex Chemicals’ planned ₹450 crore IPO marks a pivotal step in its journey from a long-standing private enterprise to a publicly listed player in India’s high-potential chemical industry. The funds raised will primarily help reduce debt burdens and support operational scaling, especially for its subsidiary Shogun Organics.
Despite recent net losses, the company’s revenue momentum and rebound in EBITDA margins demonstrate underlying business strength and operational resilience. With a 30+ year legacy in agrochemical solutions and a growing role in global supply chains, Safex Chemicals is positioning itself for the next phase of growth with greater agility, transparency, and investor participation.
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