After CarTrade Tech, Nuvoco Vistas lists at discount; Chemplast Sanmar may list at marginal premium

With some of the recent companies – like CarTrade Tech, Nuvoco Vistas, Windlass Biotech and others – making a weak debut on the bourses, the IPO enthusiasm appears to be fizzling out.

On the contrary, the grey market is signaling a different trend for specialty chemicals company, Chemplast Sanmar listing. The shares of the company are quoting at a premium of Rs 12 over its issue price of Rs 541 per share. Earlier the shares were quoting at a discount of Rs 10.

The public issue of specialty chemicals maker Chemplast Sanmar got oversubscribed more than 2 times on the last day of the bidding process on Wednesday. The company’s initial public offer (IPO) received bids for 8,30,84,454 shares till 4 pm (IST) against 3,99,52,829 shares on offer, as per exchanges data.
The quota for retail investors was subscribed 2.34 times, while that for qualified institutional buyers (QIBs) 3.84 times and non-institutional investors 1.27 times.

The Rs 3,850-crore public offer comprises fresh issuance of equity shares of Rs 1,300 crore, and an OFS (offer for sale) of Rs 2,550 crore by its promoter entity Sanmar Holdings and Sanmar Engineering Services that will offload Rs 2,463.44 crore and Rs 86.56 crore worth of shares respectively.

The Chennai-based company will utilise the net proceeds from fresh issue towards early redemption of the non-convertible debentures (NCDs) and for general corporate purposes.

Chemplast Sanmar is a leading specialty chemical manufacturer in India. The company is engaged in the manufacturing of specialty paste PVC resin, starting materials, and intermediates for agro-chemical, pharmaceuticals, agro-chemical, and fine chemical sectors. It also produces other types of chemicals such as Caustic Soda, Chlorochemicals, Hydrogen Peroxide, Refrigerant gas, and Industrial Salt.
The company has four manufacturing facilities, among which, 3 are situated at Mettur, Berigai, and Cuddalore in Tamil Nadu, and one is located in Puducherry at Karaikal.

On the financial front, the company reported total revenue of Rs 3,815.11 crore compared to Rs 1,266.77 crore in FY19. Company’s bottom line almost quadrupled during the same period from Rs 118.46 in FY19 to Rs 410.24 crore in FY21.

ICICI Securities, Axis Capital, Credit Suisse Securities (India) Private Ltd, IIFL Securities, Ambit, BOB Capital Markets, HDFC Bank, IndusInd Bank and Yes Securities were the lead managers to the issue.

It is not the first time that Chemplast Sanmar is listing on the bourses. It was delisted from the BSE, the NSE and MSE with effect from June 25, 2012, June 18, 2012 and June 25, 2012, respectively.