Everstone-backed Crystal files for India IPO

The offer will comprise an undisclosed amount of newly issued equity for up to INR5.5 billion ($84 million), along an unspecified amount of shares held by current investors including Everstone aggregating up to INR4.6 billion. Pricing for the shares has not been announced.

Proceeds from the fresh issue will primarily be used for repayment of working capital facilities, with INR3.5 billion allocated for this purpose. An additional INR800 million has been designated for funding acquisitions and other strategic initiatives.

Everstone currently holds 5 million shares in Crystal, a 3.5% stake. The size of its exit has not been announced. The PE firm invested INR1.5 billion in the company in 2011, acquiring 861,000 shares; it was later allotted an additional 12.9 million shares in a bonus issue of 15 shares for each share held by current shareholders in 2014.

Everstone has since made a partial exit, selling 8.8 million shares to Redson Cropcare, a special purpose vehicle controlled by Crystal's promoter Komal Aggarwal, for INR1.5 billion. The date of this transaction is not clear, but according to the prospectus Everstone held 13.8 million shares through March 2016, suggesting the sale occurred at some point after that date.

Founded in 1994, Crystal produces a range of agricultural chemicals, primarily pesticides but including fungicides, herbicides and fertilizers. It also distributes spraying equipment procured from manufacturers in China. In addition, Crystal markets seeds, primarily for maize, cotton, rice, millet and sorghum, and recently acquired four maize combine harvesters that it leases to farmers as part of a pilot program.

The company has five pesticide manufacturing facilities and two more under construction, in addition to three research farms for its seeds business. It has 7,000 distribution partners across India and also exports its chemical products to customers in 18 countries.

India's crop protection products market, both domestic and export-oriented, grew from INR205 billion in 2013 to INR291 billion in 2017. However, pesticide usage in the country is still 0.3 kilograms per hectare. By comparison, farmers in France and Germany use 3 and 4 kilograms per hectare, respectively.

Crystal believes the market for agricultural chemicals in India is poised for expansion, since nearly all of the country's arable land is already under cultivation and modern farming techniques offer the only way to increase yields.

For the year ended March 2017, Crystal reported INR13 billion in revenue, up from INR10.4 billion the year before. Over the same period net profit grew from INR173 million to INR851 million.

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• Topics
• South Asia
• IPO
• Industrials
• India
• Everstone Capital
• Exit
• Agriculture
• manufacturing