Gem Aromatics has announced its IPO, aiming to boost market presence and fund business needs. The offering comprises a fresh issue of 0.54 crore shares worth Rs 175 crore, alongside an offer for sale of 0.85 crore shares amounting to Rs 276.25 crore.
This balanced structure allows the company to raise growth capital while providing existing shareholders an exit opportunity, reflecting both expansion plans and investor confidence in its future prospects.
Gem Aromatics’ IPO opens today and will close on August 21, 2025, with allotment expected on August 22. The price band is fixed at Rs 309 – Rs 325 per share. Retail investors can bid with a minimum lot of 46 shares, requiring an investment of Rs 14,214.
For small non-institutional investors (sNII), the minimum is 14 lots (644 shares) at Rs 2,09,300, while big non-institutional investors (bNII) need 67 lots (3,082 shares), amounting to Rs 10,01,650. This structured allocation caters to diverse investor categories.
GMP of Gem Aromatics IPO
As of August 18, 2025, Gem Aromatics’ shares were trading at Rs 346 in the grey market, reflecting an 6.46% premium over the IPO cap price of Rs 325. This translates to a gain of Rs 21 per share, signaling healthy investor demand and positive sentiment ahead of the official listing.
Objective of the IPO
Gem Aromatics plans to utilize Rs 140 crore from its IPO proceeds for prepayment or repayment of outstanding borrowings of the company and its subsidiary, Krystal Ingredients Pvt. Ltd. The remaining funds will be directed toward general corporate purposes, supporting business operations and strengthening its financial flexibility for future growth opportunities.
Company Business
Gem Aromatics Limited manufactures speciality ingredients, including essential oils, aroma chemicals, and Value-Added Derivatives in India, with over two decades of experience. The company offers various products, from Mother Ingredients to Value-Added Derivatives.
The company offers around 70 products across four categories mint and its derivatives, clove and its derivatives, phenol, and other synthetic and natural ingredients. Widely used in oral care, cosmetics, nutraceuticals, pharmaceuticals, wellness, pain management, and personal care, its diverse portfolio supports multiple industries and strengthens its market presence.
In FY25, the company catered to 225 customers, including 44 international clients across 18 countries, with exports routed via direct sales, its US subsidiary, and third-party agencies. Backed by a 13-member R&D team, it leverages advanced technology to develop value-added derivatives, strengthening global presence and driving product innovation.
Promoter Holding
The company’s promoters include Vipul Parekh, Kaksha Vipul Parekh, Yash Vipul Parekh, and Parekh Family Trust. Their shareholding will reduce from 75% pre-issue to 55.06% post-issue, reflecting equity dilution through the IPO while retaining a strong majority stake to maintain control and strategic direction.
Financial Performance
Gem Aromatics has shown steady financial growth over the past three years. Total income rose from Rs 425.09 crore in FY23 to Rs 505.64 crore in FY25, marking consistent top-line expansion. Profit after tax also improved, reaching Rs 53.38 crore in FY25, reflecting stronger operational efficiency alongside EBITDA growth from Rs 66.19 crore in FY23 to Rs 88.45 crore in FY25.
The company’s balance sheet reflects strengthening fundamentals, with net worth climbing to Rs 283.98 crore in FY25 from Rs 179.53 crore in FY23. Reserves and surplus also grew steadily, while borrowings increased sharply from Rs 89.36 crore to Rs 222.37 crore, indicating higher leverage to support expansion and business growth initiatives.
The company reflects healthy financial ratios with an ROE and RoNW of 18.8% and a ROCE of 16.02%, showcasing efficient capital use. With a PAT margin of 10.56% and EBITDA margin of 17.55%, profitability remains strong, though a debt-to-equity ratio of 0.78 indicates moderate leverage risk.
Lead Manager & Registrar
Gem Aromatics IPO is managed by Kfin Technologies Ltd as the registrar, handling investor queries and allotments. The lead manager for the issue is Motilal Oswal Investment Advisors Ltd, a reputed name with strong IPO management experience, ensuring smooth execution and investor confidence in the offering.
Risk Factors
- Gem Aromatics relies heavily on its top 10 customers, contributing 56.06% of FY25 revenue, making customer concentration a significant risk to profitability and growth.
- The company’s top customer, dōTERRA Global Limited, has a supply agreement till December 2028. Any discontinuation could severely impact revenue, cash flows, and operational stability.
- A major portion of revenue comes from mint and mint derivatives 69.12% in FY25. Reduced demand in this category could directly affect profitability and business performance.
- An ongoing Supreme Court litigation regarding the Budaun facility land poses legal uncertainty. Any adverse verdict could negatively impact operations, financial condition, and overall business continuity.
- The company depends on raw material suppliers without long-term contracts. Supply disruptions or defaults could hamper manufacturing, weaken cash flows, and harm financial and operational performance.
Competitive Strength
- Leading Indian manufacturer of specialty ingredients, including essential oils, aroma chemicals, and value-added derivatives.
- Diverse product portfolio backed by continuous innovation and strong R&D capabilities.
- Established and long-term relationships with reputed domestic and global customers.
- Strategically located, sustainable manufacturing facilities ensuring efficiency and compliance.
- Strong leadership with experienced promoters and a capable management team.
Conclusion
Gem Aromatics Limited has launched its IPO worth Rs 451.25 crore, comprising a fresh issue and an offer for sale, with a price band of Rs 309– Rs 325. Proceeds will mainly fund debt repayment and corporate purposes.
The company, a leading manufacturer of specialty ingredients with 70+ products, serves 225 customers, including global clients. Financials show steady growth, though risks include customer concentration, mint dependency, litigation, and supplier issues. Strong R&D, diversified portfolio, and experienced promoters strengthen its market presence and future growth potential.
Written by Abhishek Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
The post Gem Aromatics IPO: From Issue Details to Financials; Here’s What You Need to Know appeared first on Trade Brains.