The Rs 600-crore Laxmi Organic Industries IPO will open for subscription on Monday, March 15, at a value band of Rs Rs 129-130 per share exactly where investors can bid for 115 shares and multiples thereafter. Ahead of initial public supplying, the speciality chemical substances manufacturer has raised Rs 180 crore from anchor investors. According to a BSE filing, the company’s IPO committee in consultation with merchant bankers has decided to allocate 1.38 crore shares at Rs 130 to 15 anchor investors. In the grey industry on Saturday, Laxmi Organic Industries shares had been trading at Rs 224, implying a premium of Rs 94 or 72.3 per cent more than the IPO value.
Also study: MTAR Tech IPO listing day technique: Grey industry premium suggests bumper listing book gains or hold shares?
Laxmi Organic Industries has planned to utilise the net proceeds from the concern for setting up a manufacturing facility for fluoro specialty chemical substances, working capital requirement, and for the acquire of plant and machinery for augmenting infrastructure improvement. Analysts at Marwadi Shares and Finance Ltd stated taking into consideration FY20 adjusted EPS of 2.66 on a post-concern basis, the business is going to list at a P/E of 48.82X with the industry cap of Rs.34,276 million. The peers of the business namely Aarti Industries Ltd is at P/E of 24.92X and Fine Organics Industries Ltd is at 35.46X. The analysts have advisable to ‘subscribe’ to this concern as extended term prospects of the stock look promising with healthier demand from the finish-user sector driving revenues for this business.
Laxmi Organic Industries Ltd. is a top manufacturer of Acetyl Intermediates and Specialty Intermediates with nearly 3 decades of practical experience in the significant scale manufacturing of chemical substances. Ronak Kotecha, an analyst at Anand Rathi Share and Stock Brokers, has also offered a ‘subscribe’ rating for extended-term to it. At the upper finish of the IPO value band, it is provided at 49.81x its FY20 earnings, with a industry cap of Rs 3,428 crore. It also stated that the business also planned to expand and optimise its capacity and item portfolio. While AR Ramachandran, Co-founder & Trainer, Tips2 Trades advised brief term traders to subscribe to this concern only for listing gains even as fundamentals seem to be great.
Laxmi Organic is at present amongst the biggest makers of ethyl acetate in India with a industry share of about 30% of the Indian ethyl acetate industry. Laxmi Organic concern comprises fresh concern of shares worth Rs 300 crore and an supply for sale (OFS) worth Rs 300 crore by the promoter Yellow Stone Trust. The business in consultation with the book operating lead managers to the concern undertook a private placement of 1.5 crore equity shares aggregating to Rs 200 crore. Consequently, the size of the fresh concern has been lowered from 500 crore to up to Rs 300 crore.
(The suggestions in this story are by the respective study and brokerage firm. TheSpuzz Online does not bear any duty for their investment tips. Please seek advice from your investment advisor ahead of investing.)