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Avoid Omkar Speciality IPO: MLR Securities
Omkar Speciality Chemicals' initial public offering of 81 lakh equity shares is opened for subscription. It has fixed price band at Rs 95-98 per equity share for the issue, which closes on January 27
Omkar Speciality Chemicals' initial public offering of 81 lakh equity shares is opened for subscription. It has fixed price band at Rs 95-98 per equity share for the issue, which closes on January 27.
Company is mainly engaged in the manufacture and sale of speciality chemicals viz. selenium compounds, iodine compounds, molybdenum compounds etc. and pharma intermediates viz. Potassium Iodate, Bismuth Ammonium Citrate, Bromoform etc.
MLR Securities has recommended investors to avoid the issue. "Omkar has a sound business model with a unique product profile but the asking price of the issue is quite expensive considering the size of the company."
"The company's market cap is coming to around Rs 186-192 crore. The company is asking for a price earnings multiple of 18.7 and 19.3 on a price band of Rs 95-98 on post issue annualized EPS of Rs 5.1 of FY11 which is quite expensive for a small player like OSPL. There is no closest peer in the listed space in terms of product profile. While other small players in specialty chemical industry like Transpek Industry, Camlin Fine Chemicals and Alkali Metals are trading on an average of 12 times their TTM standalone EPS," according to report.
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