Shares of Chemcon Speciality Chemicals seem to be in strong demand in the grey market as the premium increased by around Rs 100 after the issue closed.
Currently sources familiar with the development told Moneycontrol that Chemcon is available at a premium of Rs 375-390 per share premium on September 29, which increased from Rs 275-285 on September 23.
That means the trading premium is more than 110 percent over the final issue price of Rs 340 per share, indicating stellar demand ahead of listing.
Hence, experts feel the demand clearly indicated that the listing premium could be similar to Happiest Minds Technologies which debuted with 111 percent premium recently.
Chemcon Speciality Chemicals, the speciality chemical maker for pharma and oilfields industries, is set to debut on bourses on October 1 after its IPO witnessed strong subscription last week.
The Rs 318-crore initial public offering was subscribed 149.33 times during September 21-23, backed by demand from all kind of investors.
It was the second highest subscription this year after Happiest Minds which witnessed 150.98 times and nineth highest in a decade.
The public issue consisted a fresh issue of Rs 165 crore and an offer for sale of Rs 153 crore by promoters. Company will utilise fresh issue proceeds for capex, working capital requirements and general corporate purposes.
Chemcon is going to set up two more plants for manufacturing pharma chemicals (with capex of Rs 41 crore), which would increase its capacity from 375KL to 626KL (operational by FY22-end). This will help Chemcon expand its reach in India which is currently a net importer of HMDS/ CMIC.
Chemcon also aims to expand its product portfolio and usage of its existing products to other industries.
It is the only manufacturer of HMDS in India and third largest globally. It is also the largest player of CMIC in India and the second largest worldwide. Additionally, Chemcon is the only manufacturer of zinc bromide and the largest of calcium bromide in India.Company earned 40 percent of revenues from export which has grown at a CAGR of 18 percent over FY18-20. Chemcon enjoys high entry barriers which lead to client stickiness and long standing relationships.