BackTatva Chintan Pharma Chem IPO subscribed 15.19 times on Day 2
The offer received 49.52 million equity shares against the IPO size of 3.26 million equity shares
PremiumSpecialty chemical company Tatva Chintan Pharma Chem's initial public offering (IPO) was subscribed 15.19 times on the second day of bidding after an overwhelming response from retail investor.
The offer received 49.52 million equity shares against the IPO size of 3.26 million equity shares, data available on the exchanges.
Retail investors portion was subscribed the most with 23.96 times, non-institutional investors was subscribed 12.32 times, while qualified institutional buyers' portion was subscribed 1.98 times.
Reliance Securities in an IPO note said "The IPO is valued at 41.6 times of FY21 earnings, which looks attractive considering peers’ valuations and unique presence in specialty chemical business segment. Further, the company’s return ratio is superior compared to peers, with return on equity (RoE) standing at 32% as of FY21. Further, current capacity utilization at 55-69% for both plants offers scope for sustained growth in the medium-term. We believe the company has a robust earnings growth potential in the long-run led by strong market share, capacity expansion and long-standing relationship with the key customers."
The ₹500 crore offer comprises a fresh issue of ₹225 crore and an offer for sale of up to ₹275 crore by promoter and promoter group including Ajaykumar Mansukhlal Patel, Chintan Nitinkumar Shah, and Shekhar Rasiklal Somani.
The proceeds from the issue will be used for funding expansion of its Dahej manufacturing facility and upgradation at its R&D facility in Vadodara.
“The company is bringing the issue at PE multiple of 42.06 on post issue FY21 basis. It is one of the leading global producers of an entire range of PTCs in India and one of the key producers across the globe with a wide customer base and has strong future prospects. We recommend ‘subscribe’ to this issue for listing gain and long-term purpose," said Astha Jain of Hem Securities.
Tatva Chintan is a specialty chemical manufacturing company engaged in the manufacture of a diverse portfolio of structure directing agents (“SDAs"), phase transfer catalysts (“PTCs"), electrolyte salts for super capacitor batteries and pharmaceutical and agrochemical intermediates and other specialty chemicals.
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