Paragon Fine and Speciality Chemicals IPO to open on October 26, price band set at Rs 95-100 apiece

Paragon Fine and Speciality Chemicals makes products for pharma and medical devices sectors.

Paragon Fine and Speciality Chemicals is set to launch its initial public offering (IPO) for subscription on October 26, with a price band of Rs 95-100 per share.

The IPO consists of only a fresh issue component and there is no offer-for-sale portion. Hence, the entire fresh issue proceeds, excluding IPO expenses, will go to the company.

The speciality, cosmetics, and pharma intermediate manufacturing company is planning to mop up Rs 51.66 crore via public issue of 51.66 lakh shares at the upper price band.

Lot Size

The net issue (excluding the market maker component) for the public comes to 49.04 lakh shares, of which half of the portion is reserved for qualified institutional buyers. Further, 15 percent is reserved for high-networth individuals (non-institutional investors), and the remaining 35 percent shares are set aside for retail investors.

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Investors can bid for a minimum of 1,200 equity shares in the offer, and in multiples of 1,200 shares thereafter. Considering the investment limit of up to Rs 2 lakh, retail investors can apply only for one lot of 1,200 shares worth Rs 1.2 lakh.

The anchor book of the IPO will be opened for a day on October 25, while the issue will close for the public on October 30.

Objectives of Issue

Of the net issue proceeds, the company will spend Rs 1 crore for civil construction work in the existing premises of the factory and Rs 7.87 crore for the installation of additional plant and machinery for expansion. Further, Rs 12.90 crore will be utilised for repaying debts and the remaining funds, Rs 13 crore, will be used for working capital requirements and general corporate purposes.

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As of October 18, 2023, its total outstanding borrowings stood at Rs 13.44 crore

Financial Performance

Considering the financial performance in the past years, the earnings growth picked up in FY23 compared to the previous year, while the growth was largely muted in FY22 over the previous year. The net profit surged 120.3 percent on-year to Rs 9.89 crore for the year ended March FY23, with revenue from operations growing 23.5 percent to Rs 102.3 crore.

The profitability was driven mainly by the operating performance, with the EBITDA (earnings before interest, tax, depreciation and amortisation) increasing by 118.5 percent YoY to Rs 12.83 crore and margin expansion of 545 bps at 12.54 percent for the year FY23.

Profit in the quarter ended June FY24 stood at Rs 3.62 crore on revenue of Rs 28.8 crore.

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Listing Date

The Ahmedabad-based company that makes products for pharma, medical devices, electronics, paper, leather, plastics, and polymers is going to finalise the basis of allotment of IPO shares by November 2 and the equity shares will be credited to demat accounts of eligible investors by November 6.

The trading in equity shares will commence on the NSE Emerge on November 7.

Hem Securities is the merchant banker to the issue while Bigshare Services is the registrar to the offer.