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The IPO of Chemcon Speciality Chemicals, which opened on Monday, has seen a strong investor response regardless of the market volatility. Chemcon IPO was subscribed 7.5 instances as of 12:15 pm at this time. The producer of speciality chemical compounds is providing shares within the value band of ₹338-340 within the preliminary share sale. The problem closes on September 23. Ahead of its IPO, Chemcon Speciality Chemicals raised over ₹95 crore from 13 anchor buyers. At the higher finish of the worth band, the IPO will fetch ₹318 crore.
At the top of Day 1, the difficulty was subscribed 5.20 instances, with retail particular person investor class seeing 9.86 instances subscription.
Lot Size and possible itemizing date
The lot measurement of Chemcon Speciality Chemicals IPO is 44 shares. Retail buyers can bid for a most of 13 tons. Minimum software cash for retail buyers on the higher value band per lot is Rs. 14,960.
According to brokerages, the share allocation in Chemcon Speciality Chemicals problem is probably going to be finanlised on September 28 and the difficulty could get listed on October 1.
Link Intime India Pvt Ltd is the registrar of the IPO whereas Intensive Fiscal Services and Ambit Capital are the e book operating lead managers to the difficulty.
The preliminary public provide (IPO) of Chemcon Speciality Chemicals includes contemporary issuance of fairness shares aggregating up to ₹165 crore and a proposal on the market of up to 45 lakh fairness scrips by promoters. At the higher finish of the worth band, the IPO will fetch ₹318 crore.
The firm intends to utilise the web proceeds from the contemporary problem to meet capital expenditure for enlargement of its manufacturing facility, fund working capital necessities and common company functions.
Chemcon Speciality Chemicals Ltd is a number one producer of specialized chemical compounds akin to HMDS (Hexamethyldisilane) & CMIC (Chloromethyl isopropyl carbonate) that are predominantly utilized in pharmaceutical business (prescribed drugs chemical compounds) and inorganic bromides, predominantly used as completion fluids within the oilfields business (oil properly completion chemical compounds).
Its income and PAT grew at a CAGR of 29% and 36% respectively over FY18-20. In FY20, Chemcon had reported gross sales of ₹262 crore with internet revenue at ₹49 crore.
Samco Securities recommends subscribe to Chemcon IPO.
“If we look at Chemcon, the overall specialty chemicals business in which the company operates has stringent entry barriers on back of complex chemistry and prolonged period to be enrolled as a supplier with customers. Given the company is the only manufacturer of HMDS in India and the largest of CMIC in India in terms of production, it aims to capitalize on the potential growth in India by expanding manufacturing and sales. However, concentration risk is high since 72% of its revenue is from Top 10 clients along with dependency on a limited product portfolio. Chemcon is valued at a price to earnings multiple of 25.5 times which makes the company fairly priced when compared to its peers,” stated Nirali Shah, Senior Research Analyst, Samco Securities.
Geojit Financial Services additionally recommends “subscribe”, citing Chemcon’s wholesome enterprise efficiency, common capability expansions, strong buyer base, increasing margin profile and bettering outlook for the sector.
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