BackAs Archean Chemical IPO launches today, should you subscribe? GMP, other things to know
Archean Chemical IPO consists of fresh issue of equity shares aggregating up to ₹805 crore & OFS of up to 1.61 crore shares
PremiumSpeciality marine chemical manufacturer Archean Chemical Industries has raised ₹658 crore from anchor investors ahead of its initial public offering (IPO), which has opened for public subscription on Wednesday, November 9, 2022. The initial share sale will conclude on November 11.
The price band has been fixed in the range of ₹386 to ₹407 per share for its initial share sale. At the upper end of the price band, the IPO is expected to fetch ₹1,462 crore.
As of 3:30 pm on day 1, the issue has been subscribed 0.17 times with retail investors' category booked 0.67x, NIIs 0.16x, BSE data showed.
The firm has allocated 1,61,67,991 equity shares to anchor investors at ₹407 apiece, aggregating the transaction size to ₹658 crore, according to a circular uploaded on BSE's website.
Archean Chemical IPO consists of a fresh issue of equity shares aggregating up to ₹805 crore and an offer-for-sale (OFS) of up to 1.61 crore shares by the promoter and investors.
As per market observers, Archean Chemical shares are commanding a premium (GMP) of ₹60 in the grey market today. The shares of the company are expected to list on leading stock exchanges BSE and NSE on Monday, November 21, 2022.
“High entry barriers in the speciality marine chemicals industry bodes well for the company. In view of market leading position, established infrastructure, integrated production with cost efficiencies, consistent financial performance, high entry barriers for competitor, an experienced management team and attractive valuation, we recommend ‘SUBSCRIBE’ to the issue," said Reliance Securities.
Archean is focused on producing and exporting bromine, industrial salt, and sulphate of potash to customers around the world. It produces products from its brine reserves in the Rann of Kutch, located on the coast of Gujarat, and manufactures products at its facility near Hajipir in Gujarat.
“At higher price band, ACIL is demanding an EV/Sales multiple of 3.8x, which is in-line to the peer average. The company’s operations are likely to get support from import substitution, lower exports from the China and lower cost of operations. Thus the macros of ACIL are positive, but demanded stretched valuation is a concern. Thus we assign a “Subscribe with Caution" rating for the issue," said Choice Broking.
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