Kronox Lab Sciences may debut with 22-30% premium over IPO price

The Rs 130-crore public offer was subscribed over 117 times, with NIIs leading from the front

Kronox Lab is likely to make a positive start on its debut on the bourses on June 10 as per trends from the grey market. The stock commands a premium of Rs 30 in the grey market, suggesting gains of around 22 percent at the time of its listing.

The expectations of a decent listing is aligned with the kind of response received by the company's initial public offer. The Rs 130-crore public offer was subscribed over 117 times, with NIIs leading from the front as they bid 302 times their allotted quota. QIBs bought 89 times while Retail investors bid 54.23 times the reserved portion.

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"With the company manufacturing a wide range of chemical products catering to specialized and diverse end-user industries, we believe that the company has distinct competitive advantage in the marketplace owing to long customer approval cycles and strict product standards," Prathamesh Masdekar, research analyst at StoxBox said.

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On May 31, a day before the issue opening, Kronox Labs successfully mobilized Rs 39.05 crore through its anchor book. Investors in the anchor book included Negen Undiscovered Value Fund, Chanakya Opportunities Fund I, Minerva Emerging Opportunities Fund, Capri Global Capital, and Moneywise Financial Services.

At the upper price band company is valuing at P/E of 27.98x, EV/EBITDA 22.78x with a market cap of Rs 504.6 crore post issue of equity shares and return on net worth of 37.19 percent. "We believe that the IPO is richly priced", Anand Rathi's Narendra Solanki said.

Incorporated in 2008, it manufactures high-purity specialty fine chemicals for a wide range of industries. These chemicals are utilized in various applications, including the production of APIs, pharmaceutical formulations, scientific research, nutraceuticals, biotech applications, agrochemical formulations, personal care products, metal refineries, and animal health products.

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