The promoters of Mumbai-based JB Chemicals have put their business up for sale, mandating investment bank Avendus to look for a buyer for their 57% stake in the company, said four people with direct knowledge of the development.
Started in 1976 as an API and formulations manufacturer, JB Chemicals is owned by JB Mody and family, and as on Monday, the market capitalisation of the company stood at Rs 3,013 crore. A takeover would also trigger an open offer. PE and pharma peers have been sounded out and a formal process is due to be launched, said sources. “The company expects to fetch around 1-1.5 times its market value,” another person, privy to the company’s plans, said.
Emails sent to Pranabh Mody, son of one of the co-promoters Dinesh Mody, did not elicit any response till the time of going to press. In a telephonic response, he however, said, “No, this is incorrect. We have no comments to offer.”
As per March 30, 2019, ratings released by Crisil, the group has a diversified revenue profile. In fiscal 2018, about 42% of the consolidated revenue was derived from India and the rest from international market. “Its three brands — Rantac (anti-peptic ulcer ..
In the international segment, the group has a presence in regulated and semi-regulated markets, including Russia and countries of the Commonwealth of Independent States. The manufacturing units are in Ankleshwar, Panoli (both in Gujarat), and Daman (Union Territory of Daman and Diu).
The company’s reported standalone profit after tax (PAT) for the first nine months of fiscal 2019 was Rs 139.9 crore on an operating revenue of Rs 1,122.3 crore, as against a PAT of Rs 105.9 crore on operating revenue of Rs 935.9 crore for the corresponding period of the previous fiscal.
“Financial risk profile is healthy, driven by robust capital structure and debt protection metrics. Gearing is estimated to remain negligible for fiscal 2019 and over the medium term. Liquidity is healthy because of surplus liquid funds of about ?422 crore as on December 31, 2018, and is expected to remain stable over the medium term,” the Crisil ratings release said.