Agri-inputs maker SML weighing IPO in 2-3 yrs to fund new chemical entities

Agri-inputs company SML Ltd is considering a stock market listing within the next two to three years as it seeks funding for the development of new chemical entities, according to Managing Director Bimal Shah. The debt-free company anticipates clearer guidance on the timeline within the following year. SML is among a select group of Indian firms engaged in developing NCEs, or new chemical entities, with one molecule anticipated to hit the market soon and others in development.

Shah explained that bringing a single NCE to market can incur costs of $70-80 million, a significant investment that SML has financed internally to date. The company, which holds approximately ₹450-470 crore in cash on a near debt-free balance sheet, could utilize these funds for acquisitions, regulatory assets, or strategic partnerships, in addition to its NCE program.

SML is broadening its focus beyond its traditional sulphur fertilizer base, delving into crop nutrition, crop protection, and biologicals. Crop nutrition is projected to be the fastest-growing of these sectors over the next three years, both domestically and internationally. The company has lowered its revenue forecast for the current fiscal year to around ₹1,600 crore, from an earlier estimate of ₹1,800 crore, due to factors such as weaker monsoon rainfall, U.S. tariffs, and shipping disruptions caused by geopolitical tensions.

SML's international operations, spanning over 80 countries, generated roughly ₹600-700 crore in revenue last year and are expected to reach ₹700-800 crore this year, with a target of ₹1,000 crore within two years. The company's brand ambassador is cricket legend Sachin Tendulkar, chosen for his ability to boost farmer adoption of SML's sulphur-based fertilizers.

SML has unveiled seven new products in crop protection and crop nutrition sectors. The company currently holds a 30-40% market share in India's specialty sulphur-fertilizer segment, aiming to increase its presence to 50-60% by 2030.