The shares of Gem Aromatics made a muted debut on stock markets on August 26, listing with 2.5 percent premium over the IPO price at Rs 333.10 apiece on NSE. This comes despite the 451-crore IPO seeing strong investor interest during its three days of public bidding.
The stock then dropped more than 3 percent to close below the listing price at Rs 322.90 apiece. Its market capitalisation stands at Rs 1,687 crore.
On BSE, the shares listed at flat at the IPO price at Rs 325 apiece. The stock then dropped around 2 percent to close at Rs 319.10 apiece.
The muted listing comes despite the unlisted shares of the company trading with more than 10 percent grey market premium (GMP) over the IPO price at Rs 358 apiece, ahead of listing, according to data on Investorgain. As per IPO Watch, the unlisted shares of the company were trading with nearly 10.5 percent GMP over the IPO price.
The maiden public issue of the company, which manufactures specialty ingredients including essential oils, aroma chemicals and value-added derivatives, was subscribed over 30 times its offer size between August 19 and August 21. The price band for the IPO was set at Rs 309-325 per share.
Should you buy, sell or hold?
Longer-term investors will need to track the company's ability to broaden its customer base and maintain margin discipline before committing larger allocations, said Harshal Dasani, Business Head, INVasset PMS.
"The company, a long-established player in aroma chemicals and essential oils, reported steady performance in FY25 with revenue growth of 11 percent and net profit expansion of 7 percent. Its diversified product portfolio and focus on R&D have positioned it competitively in a niche but growing global specialty chemicals segment. Proceeds will be directed toward debt repayment and general corporate purposes, strengthening financial resilience. However, dependency on a limited set of clients and exposure to raw material price fluctuations remain notable risks," he added.
"At the upper price band company is valuing at P/E of 31.8x to its FY25 earnings, with EV/EBITDA of 21.6x and market cap of ₹ 16,977 million post issue of equity shares. We suggest investors to HOLD the issue as a long-term view on IPO according to their risk appetite," said Narendra Solanki, Head of Fundamental Research, Investment Services, Anand Rathi Shares and Stock Brokers.
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