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MUMBAI: The retail portion of Chemcon Speciality Chemicals Ltd’s preliminary public supply (IPO) was absolutely subscribed inside an hour of the problem opening on Monday. At 12:30 pm, retail particular person traders bid for 73,29,564 shares in opposition to 32,83,580 shares reserved for the class, indicating a 2.23 times subscription. Retail traders’ cash is gushing into inventory markets since March after the markets rallied almost 50% since then.
The non-institutional traders’ portion was subscribed 0.27 times. The three-day share sale of producer of speciality chemical substances Chemcon Speciality Chemicals Ltd can be open for subscription throughout 21-23 September with a worth band of ₹338- ₹340 per share.
The firm goals to lift ₹318 crore on the higher finish of the band with a recent difficulty of as much as ₹165 crore and supply for share (OFS) by promoters of as much as 4,500,000 fairness shares.
The difficulty has fastened minimal bid lot at 44 fairness shares and in multiples of 44 fairness shares thereafter. “The flooring worth is 33.8 times the face worth of the fairness shares and the cap worth is 34 times the face worth of the fairness shares,” an organization assertion stated.
The firm intends to utilise internet proceeds from the recent difficulty in the direction of capital expenditure in the direction of growth of manufacturing facility, to fulfill working capital necessities and in the direction of basic company functions.
“At the upper finish of the worth band, the problem is valued at 25.5 times FY20 worth to earnings (PE), which is cheap in comparison with friends. Further contemplating the intense prospects for chemical corporations because of shift of provide chain away from China, we consider Chemcon can be nicely positioned to seize this with its deliberate capex” stated Motilal Oswal Financial Services.
Analysts on the brokerage agency like Chemcon given its management place in area of interest merchandise, excessive entry boundaries and wholesome financials. However, shopper focus, restricted product portfolio and prison continuing in opposition to a member of promoter group are few dangers flagged off by Motilal Oswal Financial Services.
According to JM Financials, as the corporate’s profitability largely relies upon upon the worldwide costs of its merchandise there isn’t any assurance that the costs might maintain or additional enhance sooner or later. “Any vital fall in world costs of firm’s merchandise might have a cloth opposed impact on firm’s enterprise, outcomes of operations and monetary situation,” the brokerage agency stated in a observe.
Chemcon is a producer of speciality chemical substances resembling Hexamethyldisilazane (HMDS) and Chloromethyl Isopropyl Carbonate (CMIC) that are chemical substances predominately used within the pharmaceutical trade. It manufactures Inorganic Bromides used as completion fluids within the oilfield trade.
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