Specialty chemical company Tatva Chintan Pharma Chem doubled investors' money on the listing day, with the stock rallying 129.6 percent to hit an intraday high of Rs 2,486.30 on July 29. Most experts advise holding the stock for the long term in view of the company's healthy financials, global presence and a strong product portfolio. Short-term investors, however, can book partial profits, they said.
The stock opened at Rs 2,111.80 on the BSE, up 95 percent over the issue price of Rs 1,083. It was trading at Rs 2,304.35, up 112.77 percent, with volumes of 6.38 lakh equity shares at the time of publishing this copy.
With more than 100 percent gains, it is one of the strongest listings of 2021. GR Infraprojects rallied 108.7 percent and Indigo Paints climbed 109.31 percent on the listing day.
"Considering its strong product portfolio, global competence and healthy balance sheet make, it a good long-term bet. Therefore, investors can consider holding this issue for the next 3 to 5 years," said Likhita Chepa, senior analyst at CapitalVia Global Research.
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Prashanth Tapse, VP Research, Mehta Equities, also advised allotees to hold on to the stock. The market always rewards a player which has the high growth potential and if investors wish to add the stock on the listing day, they can do so keeping a long-term vision.
"We assume Tatva Chintan is well-positioned to tap the shifting global demand to India by having expertise customised solutions in specialty chemicals. We are optimistic about the sector and expect robust multi-year export opportunities ex-china as well as local demand in the current," Tapse said.
With just two-three players in the domestic market, Tatva Chintan has an opportunity to expand and explore the global market, he said.
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"Tatva Chintan stands well to get the favourable and supportive industry growth to drive sustainable business as well as profitable growth in the medium to long-term as it has well-diversified presence in pharmaceutical, agrochemical and automotive battery industry,” he said.
Considering a diversified product portfolio with high entry barriers in segments, a global presence with a wide customer base focusing on “green” chemistry processes and reasonable valuations, Tapse has a positive outlook on Tatva Chintan.
Tatva Chintan raised Rs 500 crore through its public issue that was subscribed by 180.35 times during July 16-20.
The company manufactures structure directing agent (SDAs), phase transfer catalyst (PTCs), electrolyte salts for super capacitor batteries and pharmaceutical and agrochemical intermediates and other specialty chemicals (PASC). The company is the largest and only commercial manufacturer of SDAs for zeolites in India.
Apart from its customers in India, the company also exports its products to over 25 countries, including the US, China, Germany, Japan, South Africa and the UK. During the FY21, exports of products amounted to Rs 211.99 crore, which accounted for 70.58 percent of the company's revenue from operations.
Astha Jain, Senior Research Analyst at Hem Securities, recommended to book partial profit if the stock trades at more than 90-95 percent and keep partial allotment for the long term as the company is one of the leading global producers of an entire range of PTCs in India and one of the key producers across the globe with wide customer base has strong future prospects.
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