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Investors help Chemcon Speciality Chemicals IPO report 9th highest subscription in a decade

Earlier in September, Happiest Minds Technologies' Rs 702-crore IPO had seen 8th highest subscription of 150.98 times in a decade

September 25, 2020 / 10:28 PM IST

The Rs 318-crore initial public offering (IPO) of Chemcon Speciality Chemicals has seen the 9th highest subscription in a decade, backed by response from across investors' categories.

The IPO has seen a massive 149.33 times subscription during September 21-23 as the portion set aside for non-institutional investors (NIIs) was subscribed 449.14 times, the highest subscription since January 2018.

The NII portion of Amber Enterprises on January 19, 2018, and Apollo Micro Systems on January 12, 2018, witnessed 519.26 times and 958.07 times subscription, respectively.

The reserved portion of qualified institutional buyers was subscribed 113.54 times and retail 41.21 times.

"Specialty chemical stocks are among the street's favourite in last few years. We are expecting good returns in this sector and Chemcon might also surprise," Gaurav Garg, head of research at CapitalVia Global Research, told Moneycontrol.

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Chemcon Speciality Chemicals is a manufacturer of specialised chemicals, such as HMDS (hexamethyldisilazane) and CMIC (chloromethyl isopropyl carbonate), which are predominantly used in the pharmaceuticals industry,  and contributed around 64 percent to its total revenue in FY20.

It is the only manufacturer of HMDS in India and was the third-largest manufacturer of HMDS worldwide in terms of production. The overall revenue of the company grew at a CAGR of around 29 percent over FY18-20, while EBITDA growth remained at a CAGR of around 25 percent over the same period.

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In fact, so far, every IPO, barring Angel Broking, has seen strong subscription. Angel Broking provides stock broking services and its IPO, which was subscribed 3.94 times, could have been impacted due to weakness in equity markets and higher pricing.

Earlier in September, Happiest Minds Technologies' Rs 702-crore IPO had seen 8th highest subscription of 150.98 times in a decade.

"We're seeing noticeable traction in the primary market of late, mainly on hopes of economic recovery, decent flows in the secondary market and the strong listing of recent IPOs (Rossari Biotech, Mindspace Business REIT and Happiest Minds)," Ajit Mishra, vice-president-research at Religare Broking, told Moneycontrol.

In a decade, the IPO of Salasar Techno Engineering, which was closed in July 2017, had witnessed the highest subscription of 277.28 times, followed by Apollo Micro Systems at 248.5 times in January 2018, Astron Paper & Board Mill at 243.29 times in December 2017, Capacite Infraprojects at 183 times in September 2017, and CDSL at 170 times in June 2017.

Ujjivan Small Finance Bank had seen a 165.68 times subscription in December 2019, while Amber Enterprises was subscribed 165.4 times in June 2018.

Among others, Quess Corp, Capital First (which was later merged with IDFC Bank), MAS Financial Services, BGR Energy Systems, Dixon Technologies, Advanced Enzyme Technologies, IRCTC and Avenue Supermarts' public offers saw subscription in the 105-144 times range.
Sunil Shankar Matkar
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