Last heard, the company’s shares were being dealt at a premium of Rs 120-125 in the unofficial market, translated into a premium of about 30% compared to its issue price of Rs 407.
According to the analysts tracking the grey market, investors can expect a decent listing pop from the company considering the reasonable valuations, attractive business, strong subscription and upbeat recent debuts.
Abhay Doshi, co-founder, Unlisted Arena said that the company’s premium in the grey market has been moving higher as the valuations were reasonable and issue got a strong response during the bidding process.
“The company has a robust business model with a leading position in exports of bromine and industrial salt,” he added. “It has a monopolistic position in the Indian markets as well.”
Archean Chemical Industries is India’s largest exporter of bromine and industrial salt in fiscal year 2020-21. The company is the leading speciality marine chemical manufacturer in India.
Ravi Singhal, CEO,GCL said that Archean Chemical appears to be the largest in its category and there is a roadblock to entry. “It can list between Rs 520-570 as the issue was reasonable in terms of valuation.”
The company’s Rs 1,462 crore IPO was sold in the range of Rs 386-407 per share per share, and received a solid investor response, subscribing over 32.23 times between November 9-11.
The quota reserved for qualified institutional buyers (QIBs) was subscribed 48.91 times while the one reserved for non-institutional investors (NIIs) and retailers was subscribed 14.9 times and 9.96 times, respectively.
Pravesh Gour, Senior Technical Analyst,
said that investors responded positively to the issue, particularly the institutional side but the high debt-to-equity ratio is a concern.
“Therefore, we advise investors to lock in listing gains due to the company’s reasonable valuations and presence in the specialty chemical industry,” he added.
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