HP Adhesives sets IPO price band at Rs 262-274 per share

HP Adhesives IPO price band set at Rs 262-274

HP Adhesives has set the price band for its maiden public offer at Rs 262-274 per share.

Investors will be able to bid for a minimum of 50 shares at Rs 13,700 the upper price band, and in multiples of 50 shares thereafter.

Retail investors will be able to bid for a maximum of 14 lots or 700 shares at Rs 1,91,800 at the upper price band, since bidding for retail investors in IPOs is capped at Rs 2 lakh.

The company said its price-to-earnings ratio based on diluted EPS for FY21 at the upper price band is 35.40 times, compared to the average industry P/E ratio of 81.28 times.

Also read: Data Patterns sets IPO price band at Rs 555-585 per share, to raise Rs 588 crore

HP Adhesives is a multi-product, multi-category consumer adhesives and sealants company, and its public offer will be open for subscription on December 15-17.

The initial public offer of 45.97 lakh equity shares comprises a fresh issue of 41.40 lakh equity shares and an offer-for-sale of 4.57 lakh equity shares by Anjana Haresh Motwani.

The offer will constitute 25.02 percent of the post-offer paid-up equity share capital of the company, as per the red herring prospectus.

Also read: IPO frenzy on D St: One issue a week since 2020 can't beat three a day in 'roaring 90s'

The fresh issue proceeds will be utilised for working capital requirements, and expansion of production capacity at its existing manufacturing facility at Narangi village in Maharashtra’s Raigad district and at an additional unit on the adjacent plot.

The company will also expand installed capacities for its product lines and also extend the portfolio.

In its largest product category, PVC solvent cement, HP Adhesives is among the leading manufacturing companies in India in the consumer/bazaar segment of the adhesive industry.

The company also manufactures products for select large PVC pipe manufacturing companies under co-branding or private label on order basis. Its adhesives and sealant products are used in multiple industries such as plumbing and sanitary, drainage and water distribution, general purpose building and construction, and interior operations, as well as for glazing operations, woodwork, footwear, automotive, and foam-furnishing.

Also read: Data Patterns sets IPO price band at Rs 555-585 per share, to raise Rs 588 crore

HP Adhesives clocked a profit of Rs 10.06 crore in FY21 as against a loss of Rs 4.67 crore a year ago, while revenue increased to Rs 118.16 crore from Rs 95.47 crore.

Profit in the six months ended September jumped to Rs 3.1 crore from Rs 2.93 crore in the previous corresponding period. Revenue surged to Rs 70.51 crore from Rs 44.92 crore.

Unistone Capital is the book running lead manager to the offer, while Bigshare Services is the registrar.