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Mumbai: Specialty chemical company Tatva Chintan Pharma Chem Ltd's initial public offering (IPO) was fully subscribed within the first two hours of the bidding on Friday as the offer received a strong response from investors, especially retail investors. At the end of the day, it was subscribed 4.55 times.

The offer received 14.71 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 8.23 times, non-institutional investors was subscribed 1.15 times, while qualified institutional buyers' portion was subscribed 51%.

Motilal Oswal Financial Services in an IPO note to clients said “Tatva Chintan is expected to witness strong growth for next 2-3 years given its expansion plans. It is well placed to tap opportunity in the fast growing specialty chemical space with increasing focus on green chemistry by leveraging its strong R&D capabilities. The issue is valued at 45.9 times FY21 price to equity on post issue basis, which appears reasonable, compared to peers, as it enjoys higher earnings growth.

Gujarat-based Tatva Chintan Pharma Chem raised 150 crore from 22 anchor investors ahead of initial public offer (IPO).

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.

Anand Rathi in an IPO note said "Tatva Chintan recorded revenue growth of 21.7% CAGR in FY19-21 supported by higher volume growth across the segments and the company able to improve its margin along with better working capital management and operating leverage is likely to play out, it can aid FCF considerably over the years".

“The company focus on new products either through backward/forward integration, strong customer and opportunities on account China issues will benefit the company in the medium term. Considering positive momentum in the chemical sector", the brokerage added.

The price band for the offer has been fixed at 1,073- 1,083 per equity share. ICICI Securities, JM Financial are the book lead managers to the issue.

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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