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Business News/ Markets / Stock Markets/  Sigachi Industries makes spectacular debut on bourses, lists at 267% premium
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Sigachi Industries makes spectacular debut on bourses, lists at 267% premium

The ₹125.43 crore initial public offering (IPO) was subscribed 101.91 times in the price band of ₹161 to ₹163

The stock was listed at ₹598.50. Photo: iStock (iStock)Premium
The stock was listed at 598.50. Photo: iStock (iStock)

Shares of Sigachi Industries made a stellar debut on the stock exchanges Monday. The stock was listed at 598.50, a 267% premium over its issue price of 163.

The 125.43 crore initial public offering (IPO) was subscribed 101.91 times in the price band of 161 to 163. The purpose of the issue is to fund capital expenditure for expansion of production capacity for microcrystalline cellulose at Dahej and Jhagadia, to manufacture Croscarmellose Sodium at Kurnool and for general corporate purposes

“At the upper end of the IPO price band, Sigachi Industries Ltd. is offered at price to earnings (PE) of 15.1 times its TTM earnings, with a market capitalization of 5,011 million. Given that the company is one of the leading manufacturers of microcrystalline Cellulose in India with over 30 years of experience, Pan India and International market presence, experienced management team and investment led future growth with high RoNW of 32.12% in FY21 and reasonable valuation," said Ronak Kotecha, analyst, AnandRathi.

Sigachi Industries Ltd (SIL) was incorporated as a private limited company in 1989, with the business to manufacture chlorinated paraffin and hydrochloric acid in its manufacturing unit situated at Hyderabad.

SIL is engaged in manufacturing microcrystalline cellulose which is widely used as an excipient for finished dosages in the pharmaceutical industry. The inert non-reactive, free flowing and versatile nature of MCC has varied applications in the pharmaceutical, food, nutraceuticals and the cosmetic industries. It manufactures MCC of various grades ranging from 15 microns to 250 microns. The major grades of MCC manufactured and marketed by the Company are branded as HiCel and AceCel.

“Commercial success of the company is largely dependent upon ability to develop and devise innovative grades of cellulose based excipients. Its inability to innovate new products would make its existing product portfolio redundant, which may have an adverse impact on the utility of products resultantly impacting revenue and profitability," said HDFC Securities. 


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Published: 15 Nov 2021, 10:29 AM IST
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