The Rs 500-crore public offer of Tatva Chintan Pharma Chem continued to see healthy demand from investors as it was subscribed 15.04 times on July 19, the second day of bidding.
The offer has received bids for 4.90 crore equity shares against the IPO size of 32.61 lakh equity shares, the subscription data available on exchanges shows.
The portion set aside for retail investors has been subscribed 23.73 times and that of non-institutional investors 12.21 times. Qualified institutional buyers have put in bids 1.96 times their reserved portion.
The specialty chemical company opened its IPO for subscription on July 16. It was subscribed 4.5 times on the first day of bidding.
The company is planning to raise Rs 500 crore through its offer comprising a fresh issue of Rs 225 crore and an offer for sale of Rs 275 crore by shareholders. It raised Rs 150 crore through anchor investors on July 15, at the higher end of the Rs 1,073-1,083 price brand.
Incorporated in 1996, Tatva Chintan Pharma Chem is a chemical manufacturing company that makes structure-directing agents (SDAs), phase transfer catalysts (PTCs), pharmaceutical and agrochemical intermediates, and other specialty chemicals.
Also read: Tatva Chintan Pharma Chem IPO opens, 10 key things to know about the issue
It is one of the leading global producers of an entire range of PTCs in India and one of the key producers across the globe. It is the largest and only commercial manufacturer of SDAs for zeolites in India.
Also read: Tatva Chintan IPO: Parvati Rai of KRChoksey explains why the issue got fully subscribed within hours
"Considering the wide application of its products, it serves customers across various industries and geographies providing diversification benefits. Moreover, its high-quality product portfolio, strong R&D capabilities, strategically located manufacturing facilities and a focus on "green" chemistry processes bodes well for the company," said BP Equities which has given a "subscribe" rating to the IPO for the long term.
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On the valuation front, the brokerage further said, "considering the upper price band, diluted EPS and FY21 earnings, the company is valued at 45.9x P/E which is at a discount when compared to its listed industry peers (i.e, Aarti Industries – 57.3x, Navin Fluorine- 75.2x and Alkyl Amines- 65.2x). Its stable financial performance and growth opportunities provides visibility for the long term,"
Tatva Chintan shares was trading at a premium of Rs 750 in the grey market, the IPO Watch data showed. It translates to Rs 1,833, a 69.3 percent premium over the higher price band of Rs 1,083 per share.
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