Special chemical maker Ether Industries opens today (May 24) for initial public offering (IPO) subscriptions and closes on Thursday. With a price band set at Rs 610-642 per share, the company plans to raise Rs 808.04 crore through an IPO. The IPO includes a new issue of equity shares worth Rs 627 crore and an offer for sale (OFS) of up to 2,820,000 equity shares. Prior to the sale of initial shares, the company had raised about Rs 240 crore from anchor investors. It has allotted a total of 37,42,495 equity shares at Rs 642 per share to anchor investors, taking the transaction size to Rs 240.26 crore.
Details of IPO of Ether Industries
Price band: 610-642
Contact: 10 rupees
Market Lot: 23 shares
Minimum lot: 1 lot
Offer for sale: 22%
New issue: 78%
Issue size (Amt): 808 crore
Issue size (shares): 12,586,355
QIB shares: 50%
Non-inst share: 15%
Retail shares 35%
Pre-issue sh (nos): 114,716,318
Post Issue sh (nos): 124,482,673
Aether Industries IPO Gray Market Premium
Shares of Ether Industries are trading in its high priced band at a premium of Rs 10 in the gray market on Tuesday. Once listed, Ether will join partners such as Clean Science and Technology, Nevin Florin International, Binti Organics, PI Industries, and Fine Organic Industries. After the IPO, Ether will be listed on BSE and NSE.
Should you subscribe to Aether Industries IPO?
Choice Broking: Subscribe carefully
Among the new issue net income, Rs 163 crore will be used for the proposed greenfield expansion; 137.9 crore will be used for loan repayment / prepayment and the remaining Rs. 165 crore will be used to meet the working capital requirements of the company. “In the high priced band of Rs 642, Aether is claiming an EV / sales multiple of 13.1x, which is a peer average of 15.2x. Considering its dominant position in selected special chemicals and the potential for growth from end-to-end applications, we think the company’s outlook is bright. However, an extended assessment is a concern. This is how we assign a “Subscribe with Subscribe” rating to the issue, “the brokerage said.
Ventura Securities: Membership
At an IPO price of Rs 642, AETHER is priced at 32.2X FY24 P / E. Considering the potential growth of specialty chemicals in pharma, agrochemicals and FMCG space and to improve the prospects for contract manufacturing and CRAMS under the Make-in-India initiative, we recommend a subscription rating with a price target of Rs 797, which represents a rise of 24. 18% higher than the IPO price in 18 months, ”the brokerage firm said in its IPO note.
Angel One: Subscribe
“In terms of valuation, the post-issue TTM P / E operates at 75.6x (at the top end of the issue price band), which is AIL’s historical top-line and bottom-line CAGR of% 50% and reasonable to consider. F 75% on FY19-21 respectively. Further, AIL has a customer base, strong financial track record and high ROE. Considering all the positive factors, we believe that this assessment is at a reasonable stage. So, we recommend a subscription rating on the issue, ”the brokerage firm said in a note.
Religare Broking: Neutral
The brokerage firm believes that the company deserves a separate portfolio of its market-leading products to benefit from the growing industry trends. The relentless focus on research and development (R&D) and a sustainable diversified customer base will help the company surpass the growth of the industry. Analysts believe that the Indian specialty chemicals market is expected to grow at a CAGR of 11.2 per cent in CY20-25. In this regard, the company wants to benefit from the expansion of its product portfolio and diversification into other business segments. However, despite a strong financial performance, the valuation seems to be expensive at ~ 71x FY22 annual post EPS. Unstable raw material prices and high debt levels continue to overshadow the company’s performance; Therefore, the brokerage firm has recommended a ‘neutral’ position in the IPO.
(Recommendations for this story are provided by the relevant research analysts and brokerage firms. Financial Express Online bears no liability for their investment advice. Capital market investments are subject to rules and regulations. Please consult your investment advisor before investing.)