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GR Infraprojects, Clean Science trade at over 60% premium in grey market, ahead of listing

Both companies will list their equity shares on the bourses on July 19. So far 25 firms closed their IPOs successfully and debuted in the current year 2021.

July 17, 2021 / 05:14 PM IST
 
 
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Road sector contractor GR Infraprojects, and specialty chemical company Clean Science & Technology shares traded at a massive more than 60 percent premium in the grey market, ahead of their debut next week.

The grey market premium clearly indicated that their listing could be quite strong. Both companies will list their equity shares on the bourses on July 19. So far 25 firms closed their IPOs successfully and debuted in the current year 2021.

The grey market is an unofficial platform wherein the trading in shares begin from the announcement of price band till the listing of equity shares.

GR Infraprojects

GR Infraprojects shares were available at a premium of Rs 520-530 in the grey market, the IPO Watch and IPO Central data showed.

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This resulted into trading price of Rs 1,357-1,367, higher by Rs 62.1 percent - 63.3 percent over final issue price of Rs 837 per share.

Experts feel the attractive valuations, healthy order book and the government's focus on road infrastructure could be reasons for such a strong grey market premium.

The road engineering, procurement and construction (EPC) company raised Rs 963 crore through its public issue that was subscribed 102.58 times during July 7-9, 2021.

Qualified institutional buyers and non-institutional investors provided strong support to the issue, as their portion was subscribed 168.6 times, and 238 times respectively, while a part set aside for retail investors was booked 12.57 times.

It was a complete offer for sale, so the entire money will go to selling shareholders.

GR Infraprojects is an integrated road EPC company with experience in design and construction of various road/highway projects across 15 States in India and having recently diversified into projects in the railway sector. As of March 2021, it had an order book of Rs 19,025.8 crore and comprised 16 EPC projects, 10 hybrid annuity model (HAM) projects and three other projects which gives strong revenue visibility going forward.

Clean Science and Technology

The specialty chemical company shares traded at a premium of Rs 580-600 in the grey market, which resulted into a price of Rs 1,480-1,500, up 64.4-66.7 percent over final IPO price of Rs 900.

The above premium is justified as the company has consistent track record of financial performance, international presence, monopoly in the field of its operations for many products, and attractive valuations, experts feel.

The Rs 1,546.62-crore IPO of Clean Science was a complete offer for sale by existing selling shareholders, hence the company will not get funds through public issue.

This IPO also witnessed stellar subscription of 93.41 times as the portion set aside for qualified institutional buyers was subscribed 156.37 times, non-institutional investors 206.43 times, and retail 9 times during July 7-9.

Clean Science & technology manufacture functionally critical specialty chemicals such as Performance Chemicals (i.e. MEHQ, BHA and AP), pharmaceutical intermediates (i.e. Guaiacol and DCC), and FMCG chemicals (i.e. 4-MAP and Anisole). Within 17 years of incorporation, company has grown to be the largest manufacturer globally of MEHQ, BHA, Anisole and 4-MAP, in terms manufacturing capacities as of December 31, 2020.

Company's customers comprise direct end-use manufacturers as well as institutional distributors. A majority of company's revenues are generated from direct sales to customers. Certain of company's key customers include Bayer AG and SRF for agrochemical products, Gennex Laboratories for pharmaceutical intermediates, and Vinati Organics for specialty monomer products, Nutriad International NV for animal nutrition.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Sunil Shankar Matkar
first published: Jul 17, 2021 05:14 pm

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