Specialty chemical company Tatva Chintan Pharma Chem IPO shares seem to be getting strong demand in the grey market as the premium jumped to around 60 percent over its higher end of the price band. Healthy financials, niche global play in speciality chemicals with SDAs at the centre stage, and discounted valuation compared to its peers are some of factors for strong demand, experts feel.
Shares were available at a premium of Rs 620-690 in the grey market, the IPO Central and IPO Watch data showed.
That resulted into a price of Rs 1,703-1,773 per share, a premium of 57.2-63.7 percent over higher issue price of Rs 1,083.
The grey market is an unofficial platform for trading in IPO shares. The trading in IPO shares begin at the time of announcement of price band till the listing of shares on the bourses.
Tatva Chintan IPO received full subscription in the first hour of issue opening today, supported largely by retail investors.
The offer has subscribed 2.78 times, so far, as the retail portion booked 5.35 times and non-institutional investors 50 percent, the subscription data on exchanges showed at the time of publishing this copy.
The specialty chemical company is planning to raise Rs 500 crore through public issue which comprises a fresh issue of Rs 225 crore and an offer for sale of Rs 275 crore by promoter and promoter group.
Of which, the company already garnered Rs 150 crore from anchor investors on July 15, at higher end of price band of Rs 1,073-1,083 per share.
The fresh issue proceeds will be utilised for expansion of Dahej manufacturing facility; and upgradation of R&D facility in Vadodara.
Tatva Chintan is among the key players in the specialty chemicals segment, with its range of products finding applications among the high growth segments. Engaged in manufacturing of a variety of disinfectants, catalysts, agro and pharmaceuticals intermediates and other specialty intermediates, Tatva Chintan has a good product mix across sectors of agrochemicals, pharmaceuticals, personal care etc.
"The company is bringing the issue at at P/E multiple of 42.06 on post issue FY21 basis. The company being one of the leading global producers of an entire range of phase transfer catalysts (PTCs) in India and one of the key producers across the globe with wide customer base has strong future prospects," said Astha Jain of Hem Securities which recommended a subscribe to the issue for listing gain & long term purpose.
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