SML Ltd weighing IPO within 2 to 3 years, eyes new chemical entity pipeline

The latest market report highlights that Agri-inputs maker SML Ltd, formerly known as Sulphur India Limited, is evaluating a equity market stock-exchange debut within the next two to three years as it looks to fund the development of new chemical entities (NCEs), Managing Director Bimal Shah stated.

"We have not completely decided — we are additionally evaluating it," Shah stated in an interview to PTI, adding that the debt-free firm anticipates greater clarity on the timeline within the next one to two years.

Mumbai-based SML Ltd stated it is among a handful of Indian firms developing NCEs — proprietary new molecules rather than generic formulations — with one new molecule anticipated to reach the market soon and others in the pipeline.

"We are working on NCEs, new chemical entity in the last three years. We have a new molecule coming up very soon. … NCE is a very important focus for us. Of course, this requires a lot of investment," he stated.

Bringing a single NCE to market can cost $70 million-$80 million, Shah stated, and the firm has so far self-financed the research.

These considerations may eventually lead the firm toward stock-exchange debut, but no decision has been made yet; it's still evaluating, Shah stated, adding that he anticipates to have a "clearer sense of direction this year or next", since further steps will depend on related groundwork being completed.

CASH PILE, ACQUISITION TARGETS

SML Ltd holds roughly Rs 450-470 crore in cash on a near debt-free balance sheet; funds, Shah stated, could be deployed toward acquisitions, regulatory assets or strategic tie-ups, alongside the NCE program.

The firm pointed to its earlier gain in ownership of Rotam India, an active ingredient manufacturing facility, as an example of the kind of backwards-integration deal it could pursue again.

"We've maintained a stable balance sheet over the years, and this accumulated fund is intended for the right opportunity — potentially an acquisition, strategic tie-up, or backward integration," he stated.

The stock-exchange debut deliberations come as SML pushes deeper into three business lines beyond its traditional sulphur fertilizer base: crop nutrition, crop protection and biologicals.

Shah stated crop nutrition, where the firm is promoting balanced, nutrient-efficient formulations rather than single-nutrient products, is likely to be the fastest-growing of the three over the next three years, both in India and globally.

SML has lowered its topline target for the current fiscal year to around Rs 1,600 crore, from an earlier goal of Rs 1,800 crore, citing weaker monsoon rainfall, US tariffs and shipping disruptions tied to ongoing geopolitical conflict. That would still mark an gain from roughly Rs 1,200-1,300 crore a year earlier, aided by price increases of 15-20 per cent across its product range.

International business, spanning more than 80 countries, generated roughly Rs 600-700 crore last fiscal year; SML is targeting Rs 700-800 crore this year and Rs 1,000 crore within two years, though it flagged continued tariff and shipping-related uncertainty.

Roughly 70 per cent of SML's export topline comes from crop-protection products, including insecticides and fungicides using microencapsulation and water-dispersible granule technologies, the executive stated.

SML Ltd separately unveiled cricket icon Sachin Tendulkar as its brand ambassador this year, betting his national profile can accelerate farmer adoption of its sulphur-based fertilizers. The firm estimates only a small fraction of India's farmland at present receives adequate sulphur nutrition, despite government soil surveys showing widespread deficiency.

"We are trying to connect nutrition, sports and agriculture together," Shah stated, adding that Tendulkar had sought out the partnership after noting he had never worked with an agriculture-focused firm before.

The firm recently rolled out seven new products across crop protection and crop nutrition. Shah stated crop protection products converts to sales faster since it operates on an AI-to-AI (active ingredient) basis. "We expect at least an additional Rs 100 crore this year from these new products/technologies, with crop nutrition potentially contributing even more depending on market reach and consumption expansion."

India's fertilizer industry has increasingly flagged sulphur deficiency as a hidden constraint on crop yields, with government soil-health surveys showing widespread shortfalls nationally.

SML Ltd stated the firm has 30-40 per cent market share in India's roughly 150,000-200,000 tonne specialty sulphur-fertilizer segment, a share it aims to lift to 50-60 per cent by 2030 through expanded field demonstrations and dealer outreach.

The firm, which competes with larger rivals including Coromandel International and Deepak Fertilizers, stated its patented micronized sulphur and sulphur-zinc formulations carry a elevated per-unit cost than conventional sources such as gypsum and ammonium sulphate but require substantially softer application rates.

Capacity utilization at SML's production facilities stands at roughly 50-55 per cent, Shah stated, with full utilization anticipated by 2028-29. The firm plans to move some of its research capacity toward new agri-inputs beyond sulphur, including biological crop-protection products.

Founded in 1971, SML Ltd has evolved over five decades from its firm foundation in sulphur-based crop inputs into a research-fuelled, innovation-led global agri-solutions enterprise.