Chemcon Specialty Chemicals IPO:
Chemical maker Chemcon Specialty Chemicals Limited has got a bumper listing in the stock market. The company’s stock was listed on BSE at a price of Rs 730.95. While the issue price for the IPO was Rs 340 per share. The company’s stock was listed at Rs 731 on the NSE. Explain that the expert had also hoped for a bumper listing of Chemcon. 65 percent of the company’s revenue comes from the pharma industry. The company is on a leading position in making specialty chemicals.
340 was the upper price band
The Rs 318-crore IPO of chemical maker Chemcon Specialty Chemicals Ltd opened for subscription on 21 September and closed on 23 September. Its price band was kept at Rs 338–340 per equity share. The minimum was one lot of 44 equity shares and thereafter bids could be made in multiples of 44 equity shares. The company says it intends to use the proceeds from the new issue for capital expansion, expansion of its manufacturing center, fulfillment of working expenditure and for general corporate purposes.
What is Camcon’s business
Chemcon manufactures special chemicals such as hexamethyldisilagen (HMDS) and chloromethyl isopropyl carbonate (CMIC). They are mainly used in the pharma industry. The company also produces inorganic bromide used in the oilfield industry as a supplemental fluid. In FY 2020, the company’s operating revenue is Rs 262.05 crore, EBITDA is Rs 70.26 crore and net profit is Rs 48.85 crore. During FY 2018-20, the company’s sales increased by 29% CAGR, while EBITA increased by 25% and PAT by 36%.
Intensive Fiscal Services Private Limited and Ambit Capital Private Limited have been appointed as lead managers for this issue. After the issue, the promoters’ stake will come down from 100 per cent to 74.47 per cent.
Expert at Chemcon
Brokerage house Motilal Oswal has expressed confidence in the IPO. The company is in a good position in making speciality chemicals. It has the potential to become a market leader. The company’s financial health is also looking better. The future of chemical companies is looking good with China in tension. The company also has a strong client base. However, there is also a concern with the product portfolio being limited. Brokerage house Angel Broking also suggested subscribing to it.
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