Aether Industries Limited IPO Opportunity Review

Aether Industries Limited incorporated on January 23, 2013, d is a specialty chemical manufacturer in India focused on producing advanced intermediates and specialty chemicals involving complex and differentiated chemistry and technology core competencies. The company is the sole manufacturer of chemicals such as 4MEP, MMBC, T2E, OTBN, NODG, DVL, and Bifenthrin Alcohol in India. It is also one of the fastest-growing specialty chemical companies in India, growing at a CAGR of nearly 49.5% between Fiscal 2019 and Fiscal 2021. The company has three business models i) Large scale manufacturing of intermediates and specialty chemicals ii) CRAMS (contract research and manufacturing services) and iii) Contract manufacturing.

The company has two manufacturing sites at Sachin in Surat, Gujarat. As of March 31, 2022, its product portfolio comprises over 25 products that were sold to over 34 global companies in 18 countries and over 154 domestic companies.

Promoters & Shareholding:

Ashwin Jayantilal Desai, Purnima Ashwin Desai, Rohan Ashwin Desai, Dr. Aman Ashvin Desai, AJD Family Trust, PAD Family Trust, RAD Family Trust, AAD Family Trust, and AAD Business Trust are the company promoters. 

Public Issue Details:

Offer for sale: Fresh issue of approx. 9,766,355 equity shares at Rs. 10, aggregating up to Rs. 627 Cr and OFS of approx. 2,820,000 equity shares, aggregating up to Rs. 181.04 Cr.

Total IPO Size: Rs. 808.04 Cr.

Price band: Rs. 610 – Rs. 642.

Objective: For repayment or pre-payment of debt, capital expenditure, and general corporate purposes.

Bid qty: minimum of 23 shares (1 lot) for Rs. 14,766 and maximum of 13 lots.

Offer period: 24th May 2022 – 26th May 2022.

Date of listing: 3rd June 2022.


☐ Differentiated portfolio of market-leading products.

☐ In-house research and development capabilities.

☐ The company is the largest manufacturer of 4MEP, T2E, NODG, and HEEP products in the world by volume.

☐ Aether offers its customers a one-stop-shop approach for the entire supply chain.

☐ Automated manufacturing facilities utilizing advanced technologies and systems.

☐ Professional and experienced management team.


☐ Reliance on the Pharma industry (~65%) for a significant portion of its sales could harm its business.

☐ Insurance coverage may not adequately protect it against all losses.

☐ Subject to foreign exchange risk.

☐ Subject to certain risks consequent to operations involving the manufacture, usage, and storage of various hazardous substances.

Subscribe or avoid?

Sectorial outlook – In the calendar year 2020, the global chemicals market was valued at approximately $5027 billion and it is expected to grow at a CAGR of 6.2% CAGR from $5027 billion in 2020 to reach $6780 billion by 2025. Specialty chemicals are low-volume and high-value products that are sold based on their quality or utility the global specialty chemicals industry was valued at $847 billion in 2020 and Pharmaceutical API and agrochemicals & fertilizers made up the largest two segments of the industry, accounting for approximately 25% and 24% of the global specialty chemicals industry and from 2020 to 2025, Indian specialty chemicals segment is expected to grow at a CAGR of 11.2%. Rapid industrialization in India and China is expected to drive demand for specialty chemicals further.

The financials (revenue and net profit) are shown in the graph below:

Valuation – For the last 3 years average EPS is Rs. 5.51 and the P/E is around 116x on the upper price band of Rs. 949. The EPS for FY21 is Rs. 7.36 and the P/E is around 87x and if we annualize FY22 earnings then the asking price is at a P/E of 86x. It has Clean Science (82.6x), Navin Fluorine (69x), Vinati Organics (60.2x), PI Industries (47.2x), and Fine Organics (79.6x) as listed peers as per the RHP. The company P/E is between 116x and 86x.

Recommendation – The use of specialty chemicals is evolving very rapidly in India due to increasing demand for high-end products from the FMCG, pharma, and agrochemical market and this company is aiming to capture this market and due to its diversified and market-leading products, it enjoys a quasi-monopoly in the Indian market and one of the largest producers in the global market. After considering all the factors the listing still seems a little expensive but the prospects are positive hence we would recommend “Subscribe” to this IPO for investors from a medium to long term perspective. is an award winning personal finance platform. It helps you aggregate all your personal finance accounts like FD, Equity, Mutual Funds, PPF EPF, NPS including, Credit Cards & Loans etc. It's one place where you can track, plan and invest seamlessly. empowers you to invest in zero commission direct plans of mutual funds thereby helping you generate higher on investments. The best part is it comes with a lifetime Free plan.

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