New IPO News : Chemplast Sanmar’s IPO of Rs 3850 crore has opened for subscription today (10 August 2021). The price band of the stock has been fixed at Rs 530-541. Investors can apply in one lot of 27 shares and then in multiples thereof. The company has already raised Rs 1,732 crore from 78 anchor investors before the IPO. These investors include Goldman Sachs Goldman Sachs, Abu Dabhi Investment Authority, BNP Paribas, HDFC, SBI etc.
Reserve only 10% for retail investors
Investors can apply for Chemplast Sanmar’s IPO in one lot and multiple of 27 shares. According to the upper band price of the IPO, one lot will cost Rs 14,607. 75% of the IPO is reserved for QIBs (for qualified institutional buyers). 15% reserve has been kept for NII (Non Institutional Investor). Only ten percent of the share has been kept reserved for the retail investor.
What is the opinion of experts on IPO
Marwari Financial Services says that according to the adjusted EPS of FY 2020-21 on a post-issue basis of Rs 25.95, then the company is going to be listed with a market capitalization of 8550 crores at P / E of 20.85. While the P/E of its peer company PI Industries and SRF is 61.16 and 37.26. Marwari Financial Services has given the rating of Subscribe (With Caution) to this IPO. It says that the company is well positioned to utilize the positive industry environment but still has a lot to pay for negative asset value and many other business related things. So in the long term perspective, they are cautious on this.
Angel Broking has pointed to ChemPlast Sanmar’s huge debt. Apart from this, its lenders are also imposing some restrictive conditions. This is a matter of concern for investors. Angel Broking says that this stock will trade at 17.7 P/E of 17.7XFY21 EPS. Angel Broking has rated it as ‘Neutral’.
What does the company do?
Chemplast manufactures Sanmar Specialty Chemicals. Its focus is on custom manufacturing for specialty paste PVC resin and starting material. Apart from this, it also manufactures intermediary products for the pharma, agro-chemical and fine chemicals sectors. The company has a debt of Rs 1,187 crore as of December, 2020. Grasim Industries Ltd. in India. DCM Shriram Limited (CM Shriram Limited). Gujarat Alkalies and Reliance Industries Ltd. manufactures specialty paste PVC resins.
(Article: kshitij Bhargava)
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