Fri. Mar 29th, 2024
Aether Industries Pools In ₹ 240 Crore From Anchor Investors Ahead Of IPO; IPO Subscription Day Starts Today: Should You Subscribe?Source: Freepik

One of the fastest-growing specialty chemical companies in India– Aether Industries– on Monday announced that it has raised ₹ 240 crore from anchor investors, a day before the opening of the window for its initial-share sale subscription. 

According to a circular posted on the BSE website, the company issued 37,42,495 equity shares to anchor investors for 642 each, for a total transaction value of 240.26 crore.

A total of 25 funds including Goldman Sachs, Nomura, SBI Mutual Fund (MF), Aditya Birla Sun Life MF, Kotak MF, Axis MF, IDFC MF, and Tata MF were got the shares.

The company has trimmed the IPO size to ₹ 627 crore from ₹ 757 crore planned earlier after the pre-IPO placement.

IPO Price Band:

The IPO will be a mix of fresh equity issuance and offer for sale (OFS) of up to 28.2 lakh equity shares by the promoter.

The IPO price band has been fixed at ₹ 610-642. Today, it was the first day of subscription and will conclude on May 26. 

Proceeds Utilization: 

Proceeds from the share sale will be utilized in funding capital expenditure needed for a proposed new project in Surat, Gujarat; funding working capital requirements, and paying off debts.

Offer Reservation: 

50 percent of the offer has been reserved for qualified institutional investors, 35 percent for retail investors, and the rest of 15 percent is for non-institutional investors.

Subscription: Investors can bid to the least for 23 equity shares and in multiples of 23 thereof.

Aether Industries is an Indian specialty chemicals company which specializes in advanced intermediates and specialty chemicals that need complicated and distinct chemistry and technical core skills.

In 2013, it set up a research and development (R&D) unit, and in 2017 it started commercial production. The company focuses on pharmaceutical, agrochemical, material science, electronic chemistry, high-resolution photography, and oil and gas industries.

Earnings:

The company’s operating revenue increased to ₹ 450 crore in the fiscal 2021, from ₹ 302 crore reported in fiscal 2020. The company’s net profit jumped to ₹ 71 crore in FY21 from ₹ 40 crore a year ago.

The book running lead managers to the issue are HDFC Bank and Kotak Mahindra Capital Company.

 

What Top Brokerage Houses Have To Say, Should You Subscribe To The IPO?

Anand Rathi Research: SUBSCRIBE-For Long term

“Aether Industries is expected to continue to maintain its leadership position in a few of its products due to continuous focus on R&D, enhanced capacity post-expansion plans (from 6,096 million tonnes per annum to 6,500 mtpa), synergistic business models, differentiated product portfolios of market-leading products and long-standing relationships with a diversified customer base,” according to a report of Anand Rathi Research.

It recommended a ‘SUBSCRIBE-For Long term’ rating for the initial share sale. 

It said, at the upper end of the price band, Aether Industries is valued at 72.3 times on the annualized basis of FY22 earnings, which seems to be fairly valued as there are immense opportunities for specialty chemicals in pharma, agrochemicals & FMCG space, and better prospects for contractual manufacturing & CRAMS under Make-in-India initiatives. 

ICICI Direct: Avoid

Aether Industries is a niche player in the specialty chemical space as it has to dominate market share in some specific products with high margins. According to ICICI Direct, with that, at the upper price band, it is valued at ~58.9x EV/EBITDA and ~72.4x P/E for 9MFY22 (annualized), which looks demanding. 

The subscription can be AVOIDED due to stretched valuation.

Angel One: SUBSCRIBE

Analysts at Angel One think that the IPO Valuation of Aether Industries looks reasonabl, keeping in view its historical top-line and bottom-line CAGR of ~50 percent and ~75 percent, each, over FY19-21. 

“Aether’s diversified customer base, strong financial track record, and higher return on equity make it a favorable subscription,” it said. Therefore, the brokerage firm gave ‘subscribe’ ratings on the issue.”

 

By Harshita Sharma

I bring to you updates from business, policy and economy spectrum.

Leave a Reply

Your email address will not be published. Required fields are marked *