HP Adhesives shares are selling at a premium of Rs 70 in the gray market. According to sources, its shares will be listed in the stock market on December 27.
HP Adhesives IPO may be listed next week. The IPO of HP Adhesives Ltd. was open for subscription from December 15 to 17. This share was subscribed 20.96 times. 25,28,500 shares were offered under the IPO. In comparison, applications were received for 5,29,89,650 shares. The price band of 45,97,200 equity shares was Rs 262-274 per share. There is a good demand for the shares of HP Adhesives in the gray market. These shares are selling at a premium of Rs 70 in the gray market. According to sources, its shares will be listed in the stock market on December 27.
What will the company do with the fund?
The company will use the funds from the IPO to meet its working capital requirements and expand its manufacturing facility at Narangi village in Maharashtra’s Raigad district. Along with this, it is going to install another unit. The company will also enhance the capacity of its existing product lines and add new products to the portfolio.
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What is the opinion of brokerage firms regarding investment
According to Hem Securities, the product portfolio of the company is quite large. The experience of the promoter of the company is very good and the management is strong. Its sales and distribution network is also very good. The company’s manufacturing facility is also well positioned as per its strategic plan. This increases its operational efficiency. Looking at all these aspects, its shares can be bought.
According to Choice Broking, it can only be compared with Pidilite Industries among the peer companies of HP Adhesive. Pidilite Industries is the market leader. In terms of revenue, HP Adhesive is far behind Pidilite Industries. Its revenue in the financial year 2020-21 has been only Rs 144 crore. Its profit is also much less than Pidilite. Therefore, further subscription can be done keeping in mind the profit margin of the company.
Marwadi Shares and Finance says that the company is going to be listed with a PE of 49.23 with a market cap of more than Rs 500 crores. While Pidilite Industries is trading with a PE of 89.75. Therefore, the IPO of this rapidly growing adhesive and silent company can be subscribed. It is looking strong in terms of valuations in its peer companies.
(The stock recommendations given in the story are those of the respective research analyst and brokerage firm. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)
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