Moneycontrol PRO
Open App
you are here: HomeNewsBusinessIPO

HP Adhesives to go listed tomorrow. Is a strong debut on the cards?

HP Adhesives traded at a price of Rs 354 per share in the grey market, a premium of 29 percent or Rs 80 over and above the issue price of Rs 274 per share

December 26, 2021 / 10:48 AM IST
HP Adhesives IPO

HP Adhesives IPO

 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

HP Adhesives, a fast-growing multi-product, multi-category consumer adhesives and sealants company, is expected to see around 20-30 percent listing gains on December 27, given the double-digit grey market premium, strong subscription numbers and healthy growth potential, experts feel.


The public issue of the company was opened for subscription on December 15, and finally closed with 20.96 times subscription December 17, garnering bids for 5.29 crore equity shares against an IPO size of 25.28 lakh units. Retail investors showed the maximum interest in the issue as their reserved portion was subscribed 81.24 times.


Non-institutional investors’ portion was booked 19.04 times, and a part set aside for qualified institutional buyers saw 1.82 times subscription.


The public issue fetched the company Rs 126 crore at the upper price band of Rs 274 per share.


“HP Adhesives is expected to list at a healthy premium of 25-30 percent based on grey market premium, strong subscription numbers and positive growth prospects,” said Swapnil Shah, Head of Research at BP Wealth.

Close

Volatile financials and absence of long-term contracts with distributors, however, raised concerns for the stock, he added. “Moreover, the issue seems to be fully priced on the valuation front.”


Click Here To Read All IPO Related News


Abhay Agarwal, Founder and Fund Manager at Piper Serica, also feels that HP Adhesives should list at a premium of 20-25 percent based on the current market trends.


HP Adhesives traded at Rs 354 per share in the grey market, a premium of 29 percent or Rs 80 over and above the issue price of Rs 274 per share, as per IPO Watch.


After more than 5 percent correction, the market showed smart recovery from its recent lows. The Nifty50 rallied more than 3.6 percent from last Monday’s low of 16,410 amid easing Omicron worries.


Also read - Travel booking website TBO.com files draft papers to raise Rs 2,100 crore via IPO


Rajnath Yadav, Research Analyst at Choice Broking, however, feels that considering the current equity market sentiment and the subscription data, there is less possibility of healthy returns on the listing day.


The company manufactures a wide range of consumer adhesives and sealants such as PVC, cPVC and uPVC solvent cement, synthetic rubber adhesive, PVA adhesives, silicone sealant, acrylic sealant, gasket shellac, other sealants and PVC pipe lubricant. It also manufactures these products for select large PVC pipe manufacturing companies under co-branding or private label on order basis.


Also read - Top 10 of the 65 public listings that hit the market this year


The company also sell ancillary products like ball valves, thread seal and other tapes and FRP products for drainage and architectural solutions that are distributed along with its products to the end customers through its distribution network.


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 revenues increased to Rs 118.16 crore from Rs 95.47 crore.


Also read - Protean eGov Technologies files draft papers with SEBI to raise funds via IPO


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.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those 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: Dec 26, 2021 10:48 am
Sections
ISO 27001 - BSI Assurance Mark