Tatva Chintan Pharma Chem IPO gets fully subscribed within 70 minutes of bidding

At 11:10 am, the issue received applications for around 34,59,898 shares against an offer of 32,61,882 shares, which sums up a subscription of 1.06 times. 

Tatva Chintan Pharma Chem, IPO that opened for bidding on Friday was fully subscribed within 70 minutes, reports The Economic Times.  The company has launched a Rs 500 crore IPO.

The subscriptions are mostly on the grounds of huge interest from retail investors. At 11:10 am, the issue received applications for around 34,59,898 shares against an offer of 32,61,882 shares, which sums up a subscription of 1.06 times.

The Gujarat-based chemical company has gained bids estimating Rs 149.99 crore from 22 anchor investors at an upper price band of Rs 1,083 per equity share. 

Goldman Sachs, HSBC, Axis MF, Aditya Birla MF, Nippon Life AMC, Aberdeen, SBI Life Insurance, HDFC MF, and Mirae Asset are few among the institutional investors who have invested in the anchor round.

Analysts have suggested investors subscribe to the Rs 500 crore IPO. The price band of the issue is kept at Rs 1,073-1,083 per share. Bids are enabled for a minimum of 13 shares following in multiples thereafter.

The IPO constitutes fresh equity shares worth Rs 225 crore coupled with an offer for sale by the promoters and shareholders worth Rs 275 crore.

Tatva Chintan Pharma Chem aims to utilize the fresh issue of Rs 225 crore worth of shares to fund its CAPEX plants namely the Dahej Manufacturing plant. Further, it also plans to upgrade its Vadodara R&D facility.

The company’s growth prospects are bright considering its leadership status in several product categories of specialty chemicals along with its significant presence in the export markets. Furthermore, it operates in segments that are likely to witness a growth in environmentally sustainable products resulting in higher growth potential.

Analysts at KR Choksey Investment Managers recommended to ‘subscribe’ rating for long-term gains from the IPO.

On the upper price band of Rs 1,083 and EPS of Rs 26.02 for FY21, the P/E multiple stands to be 41.6 times, putting a significant discount when compared to the industry average of around 56 times.

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