Maize-based speciality products manufacturer Paramesu Biotech has submitted its draft papers to the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) aimed at raising Rs 600 crore. The IPO consists of a fresh issue of equity shares worth Rs 520 crore and an offer-for-sale (OFS) of Rs 80 crore by the promoter, Unimark Business Solutions. Currently, the promoter holds 92.19% of Paramesu, while public shareholders own the remaining 7.81%.
Paramesu may also pursue a pre-IPO round to raise Rs 90 crore, which, if completed, would reduce the amount of the fresh issue.
Key Financials and Business Overview
Based in Andhra Pradesh, Paramesu Biotech operates one of India’s largest maize-based speciality products manufacturing facilities, with an installed capacity of 800 tonnes per day (TPD) at Devarapalli. The company produces various types of modified starches, including dextrin, pre-gelatinized starch, thin boiled starch, cationic starch, oxidized starch, and spray starch, catering to clients such as Emami Paper Mills, Singhania Foods International, and Vikas Cattlefeed, among others.
For the fiscal year ended March 2024, Paramesu recorded a 24% increase in net profit, reaching Rs 40.3 crore, despite modest revenue growth of 0.6%, bringing total revenue to Rs 627.8 crore. The company’s EBITDA surged by 35% to Rs 76.5 crore, with an EBITDA margin of 12.2%, an expansion of 310 basis points year-on-year. In the first half of FY25, Paramesu reported a profit of Rs 26.85 crore on revenue of Rs 407.6 crore.
Utilization of IPO Proceeds
Paramesu intends to allocate Rs 330 crore from the IPO proceeds towards the establishment of a new manufacturing plant with a capacity of 1,200 TPD in Narmadapuram, Madhya Pradesh. Additionally, Rs 85 crore will be used to reduce existing debt, which stood at Rs 216.2 crore as of September 2024, with the remainder going towards general corporate purposes.
Competitive Landscape and Advisors
Paramesu competes with other listed companies in the industry, including Sanstar, Gujarat Ambuja Exports, Gulshan Polyols, and Sukhjit Starch and Chemicals. The IPO will be managed by Pantomath Capital Advisors, with Bigshare Services appointed as the registrar.
This IPO is part of Paramesu Biotech’s strategy to boost production capacity, strengthen its financial position, and expand its footprint in India’s maize-based speciality products market.
