As per NSE, the issue received bids for 1,19,68,560 shares compared with the issue size of 3,99,52,829 shares, meaning a subscription of 30 per cent. The company had on Monday raised Rs 1,732 crore from anchor investors.
Sources in the grey market say the stock is commanding a premium of Rs 18-20 now, against around Rs 31 on Monday.
Most analysts are cautious on the issue given the negative net worth of the company.
“While we believe that the India specialty chemical industry is going to be one of the biggest beneficiaries of shifting of supply chains post the Covid-19 pandemic, we have concerns over the company’s high debt and negative net worth,” said Angel Broking, which is ‘neutral’ on the issue.
Chemplast Sanmar, which is coming with its IPO nearly a decade after delisting from bourses, is offering its shares at 21 times its adjusted FY21 EPS of Rs 26.
“We assign ‘subscribe with caution’ rating to this IPO as the company is well-positioned to capture favorable industry dynamics. However, the negative net asset value along with higher trade payable days keeps us cautious from a longer-term perspective,” said Saurabh Joshi of Marwadi Shares and Brokers.
The firm is one of the leading specialty chemical manufacturers in India. The issue, with a price band of Rs 530-541, opened for bidding on Tuesday. The offer will close on Aug 12, 2021. The company is eyeing to raise about Rs 3,850 crore from the primary market.
The issue comprises fresh issuance of shares, aggregating up to Rs 1,300 crore, and an offer for sale of up to Rs 2,550 crore by promoters and existing shareholders. Promoters Sanmar Holdings (SHL) and Sanmar Engineering Services (SESL) will offload equity shares worth Rs 2,463.44 crore and Rs 86.56 crore respectively, in the offer for sale.
Chemplast said the net proceeds from the fresh issue will be utilized for early redemption of non-convertible debentures worth Rs 1,238.25 crore and general corporate purposes, whereas proceeds from the offer for sale will go to the existing shareholders.
