The shares of Gem Aromatics are set to make their market debut tomorrow (August 26). The Rs 451-crore IPO saw strong investor interest during its three days of public bidding.
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.
Gem Aromatics IPO GMP:
Ahead of listing, the unlisted shares of the company were trading with a grey market premium (GMP) of nearly 9 percent over the IPO price at Rs 351 apiece, according to data on Investorgain. This is slightly lower than the 8 percent GMP quoted by the site last week.
According to IPO Watch, the unlisted shares of the company were trading with a grey market premium (GMP) of around 8 percent over the IPO price. The shares are scheduled to list on BSE and NSE on August 26.
Gem Aromatics IPO: What to expect?
The strong over subscription indicates broad-based investor conviction in the company's fundamentals, though the grey market premium has remained measured at around 7–9 percent, pointing to potential listing gains in the same range, 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. The grey market’s tempered premium signals that investors are aligning expectations with fundamentals rather than speculation," he added.
While the IPO appears attractive for short-term participants eyeing listing gains, longer-term investors will need to track the company's ability to broaden its customer base and maintain margin discipline before committing larger allocations, Dasani noted.
"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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