Microcrystalline cellulose Sigachi Industries on November 15 started off trade with a stellar premium of 252.76 percent on the bourses. The stock opened at Rs 575 on the BSE, against issue price of Rs 163.
The listing expectations as well as grey market premium had indicated listing premium of at least 100 percent over issue price.
The Rs 125.43-crore public issue had seen overwhelming response from investors as it was subscribed 101.91 times during November 1-3, 2021. Qualified institutional buyers had bought shares 86.51 times the portion set aside for them, and non-institutional investors had put in bids 172.43 times a part set aside for them. The reserved portion of retail investors was subscribed 80.49 times.
Presently, the company manufactures 59 different grades of microcrystalline cellulose at its manufacturing units, situated at Hyderabad and Gujarat with an aggregate installed capacity of 11,880 MTPY. With over 30 years of continuous growth, three multi-locational manufacturing facilities and consistent focus on delivering premium quality products, the company is one of the leading manufacturers of MCC (cellulose based excipients) in India.
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It has also entered into operations and management agreements with Gujarat Alkalies and Chemicals (GACL) for operating and managing the manufacturing units owned by GACL and for contract manufacturing of sodium chlorate, stable bleaching powder and poly aluminum chloride in the said units.
The funds raised from public issue will be utilised for expansion of production capacity for microcrystalline cellulose (MCC) at Dahej & Jhagadia, Gujarat; and manufacturing of croscarmellose sodium (CCS), a modified cellulose used as excipient at Kurnool, Andhra Pradesh.
All the brokerages had a subscribe rating on the issue. "Company being one of the leading manufacturers of MCC (cellulose-based excipient) in India with over 30 years' experience has pan India and International market presence. Company with its well experienced management team with proven project management and implementation skills has a comprehensive product portfolio that enables the company to serve diverse end-use applications. Company with its presence across diverse industry verticals with long standing relationships with customers has growth led by continuous investment and focus on R&D. Hence looking after all above, we recommend the “subscribe” issue," said Hem Securities.
Anand Rathi Research had also assigned a subscribe rating to IPO, given that the company is one of the leading manufacturers of microcrystalline cellulose in India with over 30 years of experience, Pan India and International market presence, experienced management team and investment led future growth with high return on net worth of 32.12 percent in FY21 and reasonable valuation.
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