The shares of Ellenbarrie Industrial Gases listed at Rs 492 apiece on BSE on July 1. This marks a premium of 23 percent over the issue price of Rs 400 apiece.
After the strong market debut, the shares of the company jumped 10 percent to remain locked in the upper circuit at Rs 541.20 apiece.
On NSE, the shares were listed with a premium of 21.5 percent over the IPO price at Rs 486 apiece. The listing premium is higher with grey market estimates. Ahead of listing, the unlisted shares of the company were trading with a grey market premium (GMP) of 14.25 percent over the IPO price at Rs 457 apiece, as per Investorgain.
"At listing, the stock trades at nearly 80x FY25 earnings, which is steep on the face of it. But valuation is often contextual. Ellenbarrie’s EBITDA margin stands at 36 percent and net profit margin at 27 percent among the best in the industry. These high-quality financials justify the market optimism," said Harshal Dasani, Business Head INVasset, PMS.
"For now, the listing premium reflects investor belief in the company’s profitability and positioning — but maintaining that confidence will hinge on steady performance in a capital-intensive, demand-sensitive industry," he further said.
The Kolkata-based company's Rs 852-crore IPO saw strong investor interest, being subscribed over 22 times during its three days of public bidding. The maiden public issue of the company received bids for 33.52 crore shares against 1.51 core shares on offer, according to data available with the NSE. The category for non-institutional investors was subscribed over 15 times, while retail individual investors (RIIs) quota was booked more than two times.
The company had launched its IPO to raise Rs 852.53 crore through a fresh issue of shares worth Rs 400 crore, and an offer-for-sale of 1.13 crore shares worth Rs 452.53 crore. The Indian company that specialises in the production of industrial, medical, and speciality gases had set a price band of Rs 380-400 per share for the IPO.
A day before the IPO opened for public subscription, Ellenbarrie Industrial Gases raised Rs 255.8 crore from several anchor investors on June 23. HDFC Mutual Fund, Axis Mutual Fund, Reliance Capital Trustee, Bandhan Mutual Fund, Tata MF, Motilal Oswal Mutual Fund, Edelweiss Mutual Fund, and Union Mutual Fund acquired 36.92 lakh shares worth Rs 147.69 crore in Ellenbarrie via anchor book.
Ellenbarrie intends to utilise fresh issue proceeds for repayment of its debt, setting up of an air separation unit at Uluberia-II plant, and general corporate purposes. The offer-for-sale proceeds will go to the selling shareholders i.e. promoters - Padam Kumar Agarwala, and Varun Agarwal.
The company manufactures several industrial gases including oxygen, carbon dioxide, acetylene, nitrogen, helium, hydrogen, argon and nitrous oxide, as well as dry ice, synthetic air, firefighting gases, medical oxygen, and liquid petroleum gas, which are used in various industries such as steel, pharmaceuticals and chemicals, healthcare, engineering and infrastructure, railways, aviation, defence, aerospace, and petrochemicals.
"As one of India’s oldest industrial gas manufacturers, with a 50+ year legacy and nine operational facilities across southern and eastern India, the company commands a strong presence in oxygen, nitrogen, acetylene, and argon production. It caters to a diversified industrial base including steel, pharma, and healthcare. Yet, the regional concentration and sectoral exposure make the business sensitive to cyclical trends," said Harshal Dasani, Business Head INVasset, PMS.
Motilal Oswal Investment Advisors, IIFL Capital Services, and JM Financial was acting as merchant bankers for Ellenbarrie Industrial Gases IPO.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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