Specialty chemical producer Aether Industries’ preliminary public providing (IPO) opens for subscription at the moment (24 May), and can shut on Thursday. With a value band fastened at Rs 610-642 per share, the corporate plans to boost Rs 808.04 crore by way of the IPO. The IPO consists of a contemporary difficulty of fairness shares aggregating to Rs 627 crore and a proposal on the market (OFS) of as much as 2,820,000 fairness shares. Ahead of the preliminary share sale, the corporate raised round Rs 240 crore from anchor traders. It has allotted a complete of 37,42,495 fairness shares to anchor traders at Rs 642 per share, taking the transaction dimension to Rs 240.26 crore.
Aether Industries IPO particulars
Price Band: Rs 610-642
Face Value: Rs 10
Market Lot: 23 shares
Minimum Lot: 1 Lot
Offer for Sale: 22%
Fresh Issue: 78%
Issue Size (Amt): Rs 808 crore
Issue Size (Shares): 12,586,355
QIB Share: ≤ 50%
Non-Inst Share: ≥ 15%
Retail Share ≥ 35%
Pre difficulty sh (nos): 114,716,318
Post difficulty sh (nos): 124,482,673
Aether Industries IPO Grey market premium
Shares of Aether Industries have been buying and selling at Rs 10 premium to its higher value band within the gray market on Tuesday. Once listed, Aether will be a part of its friends like Clean Science and Technology, Navin Fluorine International, Vinati Organics, PI Industries, and Fine Organic Industries. Post the IPO, Aether can be listed on BSE and NSE.
Should you subscribe to Aether Industries IPO?
Choice Broking: Subscribe with Caution
Of the contemporary difficulty web proceeds, Rs 163 crore can be used to fund the proposed greenfield enlargement; Rs 137.9 crore can be utilized for reimbursement/prepayment of the borrowings and relaxation Rs 165 crore can be used to fund the working capital requirement of the corporate. “At higher price band of Rs 642, Aether is demanding an EV/Sales multiple of 13.1x, which is in-line to peer average of 15.2x. Considering its dominant position in the select specialty chemicals and growth prospects from the end use applications, we feel the company has buoyant outlook. However, a stretched valuation is a concern. Thus we assign a “Subscribe with Caution” score for the difficulty,” the brokerage stated.
Ventura Securities: Subscribe
“At the IPO price of Rs 642, AETHER is valued at 32.2X FY24 P/E. Considering the growth opportunities for speciality chemicals in pharma, agrochemicals & FMCG space, and improving prospects for contractual manufacturing & CRAMS under Make-in-India initiatives, we recommend a SUBSCRIBE rating with a price target of Rs 797, which represents an upside of 24% over the IPO price in 18 months,” the brokerage agency stated in its IPO notice.
Angel One: Subscribe
“In terms of valuations, the post-issue TTM P/E works out to 75.6x (at the upper end of the issue price band), which is reasonable considering AIL’s historical top-line & bottom-line CAGR of ~50% and ~75% respectively over FY19-21. Further, AIL has diversified customer base, strong financial track record and higher ROE. Considering all the positive factors, we believe this valuation is at reasonable levels. Thus, we recommend a subscribe rating on the issue,” the brokerage agency stated in its notice.
Religare Broking: Neutral
The brokerage agency believes that the corporate is well-placed to learn from rising trade tendencies given its differentiated portfolio of market-leading merchandise. A relentless give attention to analysis and improvement (R&D) and long-standing diversified buyer base will assist the corporate outperform trade progress. Analysts consider that the Indian specialty chemical substances market is anticipated to develop at 11.2 per cent CAGR over CY20-25. Given this, the corporate is primed to learn from its product portfolio enlargement and diversification in different enterprise segments. However, regardless of a powerful monetary efficiency, valuations seem costly at ~71x FY22 annualized submit EPS. Volatile uncooked materials costs and excessive debt degree proceed to shadow the corporate’s efficiency; therefore, the brokerage agency beneficial a ‘neutral’ stance on the IPO.
(The suggestions on this story are by the respective analysis analysts and brokerage corporations. Financial Express Online doesn’t bear any accountability for his or her funding recommendation. Capital markets investments are topic to guidelines and rules. Please seek the advice of your funding advisor earlier than investing.)
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