Chemplast Sanmar’s IPO was fully subscribed on the last day of subscription. Investors have so far placed bids for 1.93 times the total IPO. Chemplast Sanmar is aiming to raise Rs.3,850 billion through the IPO and is offering shares in the fixed price range of Rs. 530-541 per share with a face value of Rs. 5. Investors can bid in an offer lot of 27 shares for the issue until Thursday evening and many times after that. Chemplast Sanmar is a manufacturer of specialty chemicals with a focus on special paste PVC resin and customer-specific production of raw materials and intermediates for the pharmaceutical, agrochemical and fine chemical industries. Chemplast Sanmar IPO Grey Market Premium.
Subscription update
Retail investors were the first category of investors to fully subscribe to their portion of the issue. So far, private investors have bid for 2.18 times their stake or for 1.58 billion shares. Non-institutional investors have only bid 28% of the reserved portion and have made offers for only 30.67 lakh shares for 1.08 crore in the offer. Qualified Institutional Buyers (QIB) subscribed their share Thursday, subscribed 2.68 times and offered 5.83 crore stock shares against the offered 2.17 crore shares. In total, offers were made for 7.73 billion shares against 3.99 billion shares offered to investors.
On the gray market, Chemplast Sanmar’s shares traded at a weak premium of 18-20 rupees per share, or just 3.7% of the IPO price. The gray market premium for Chemplast Sanmar has fallen since it went public for subscription. The IPO is a mixture of a reissue of shares valued at Rs 1,300 crore and an Offer for Sale (OFS) valued at Rs 2,550 crore. After the IPO, the promoter group’s stake in Chemplast Sanmar will decrease from the current 100% to 55%, while the public stake will be increased to 45%.
Long-term Subscribe
The company is bringing the issue at a price range of Rs 530-541 per share with a P / E of 24 on the EPS after the FY21 issue. With a strong market position in specialty chemicals, the company is well positioned to capitalize on favorable industry momentum. Industries in which the company occupies a leading position also have high entry barriers. Therefore, after all of the above, we recommend a “Long Term Subscribe” on this topic.