Missed share allocation in Clean Science IPO? Should you buy post-listing?
Premium- Clean Science shares listed today at a sharp premium at over ₹1,600 per share against its issue price of ₹900
Clean Science and Technology Limited (CSTL) made a strong debut on the stock exchanges on Monday as its shares listed at nearly 100% premium of over ₹1,600 per share as compared to its issue price of ₹900 per share. The shares surged as high as over ₹1,770 intra-day on the NSE. The stock closed nearly 10% lower at ₹1,583 apiece. CSTL is one of the leading global specialty chemical manufacturer, focused on developing green chemicals.
The Pune-based company manufactures functionally critical specialty chemicals such as performance chemicals, pharmaceutical intermediates, and FMCG chemicals. The specialty chemical manufacturer had seen an overwhelming subscription of over 93 times, given its leadership in niche green chemicals.
Motilal Oswal Financial Services expects the stock to do well. Green chemicals demand is expected to grow at 10.5% CAGR (F&S report) globally over CY19-25E and CSTL has built well diversified product portfolio in this space to capitalize on this opportunity, he said.
''We like Clean Science given its global leadership in green chemicals, diversified product portfolio, robust financials with industry leading margins/return ratios and strong focus on ESG front. We expect the stock to do well post listing given the huge response in IPO, robust financials and strong demand for cos in clean chemistry," Siddhartha Khemka of Motilal Oswal said.
Clean Science is the only company globally to use vapor phase process for Anisole (used as a key raw material), Khemka said. It also manufactures sulphur-free BHA & sulphur-free DCC. It has grown to be the largest manufacturer globally of MEHQ and BHA and second largest for AP under Performance Chemicals (69% of FY21 revenues) while it is largest for both Anisole/ 4-MAP under FMCG Chemicals (12% of revenues). It is the third largest for Guaiacol and among the largest for DCC under Pharma Intermediates (16% of revenue), he added.
Prior to the IPO, Clean Science and Technology had raised ₹464 crore from anchor investors. Many brokerages had recommended subscribe to the issue, citing long-term growth potential of the company and possibility of listing gains.
S Ranganathan, Head of Research at LKP securities said, "The day clearly belonged to the Primary Market with the twin listings of Clean Science & GR Infra making IPO investors happy with stellar listing gains. Despite indices losing a percentage, the broader markets were seen buzzing around across select pockets like exchanges & depository names even as HDFC group companies witnessed profit-taking today.''
MINT PREMIUM
See All
Never miss a story! Stay connected and informed with Mint. Download our App Now!!