Laxmi Organics Industries, a specialty chemicals manufacturer, has opened its Rs 600 crore initial public offering (IPO) for subscription today on March 15, 2021. The company has fixed the price band for its issue at Rs 129-130 per share. The IPO closes on March 17, 2021.
The shares of the specialty chemical manufacturer are likely to be listed on the bourses on March 25.
Grey market premium of Laxmi Organics IPO
The initial public offer (IPO) of Laxmi Organic was subscribed 1.04 times within three hours of the first day of the bidding process on Monday.
The issue received 3,42,00,310 bids as of 1 pm, against a total offer of 3,25,58,138 shares.
Dealers of unlisted shares said the stock is trading at Rs 232-235 range in the grey market, meaning a premium of 81 percent over the upper limit of the price band.
“At Rs 130, the stock is available at 48.8 times FY20 EPS. We believe valuations are on the higher side given it is a commodity business. We also believe that the upcoming incremental opportunity from fluoro specialties division for three/four years forward is also largely discounted in the price and thus leaves limited opportunity on the table,” said Mitesh Shah and Dhavan Shah of ICICI Securities.
The lot size in Laxmi Organic IPO is 115 shares. Axis Capital and DAM Capital Advisors are the book-running lead managers to the issue.
The initial public offer (IPO) comprises fresh issuance of shares aggregating to ₹300 crores and an offer for sale worth ₹300 crores by the promoter Yellow Stone Trust. Post-IPO, the shareholding of promoters and promoter groups will fall to 89.5%, from 72.9%.
Laxmi Organic Industries is among the largest manufacturers of ethyl acetate in India. It has two manufacturing facilities in Mahad, Maharashtra, and accounts for 30 percent of the ethyl acetate market in the country.
In the coming years, the company’s aim is to establish itself as a leader in specialty intermediates and become the growth partner of choice to global Life Sciences, Crop Sciences, and Pigments companies.
