Tatva Chintan Pharma Chem’s IPO has garnered 180 times subscription, making it the second-most subscribed offering of the year. The 3.26-million share offering garnered bids for 588 million shares, generating demand worth Rs 63,713 crore. The institutional investor portion of the IPO was subscribed 185 times, the high networth individual (HNI) portion was subscribed 512 time and the retail portion garnered 35 times subscription. In March, the IPO of MTAR Technologies had garnered 200 times subscription.
Tatva Chintan is a chemical manufacturing company that produces structure-directing agents (SDAs), phase transfer catalyst (PTCs), electrolyte salts for supercapacitor batteries, pharmaceutical and agrochemical intermediates alongside other specialty chemicals. The company’s Rs 500-crore IPO consisted of 225 crore fresh fund raise and Rs 275 crore offer for sale. The price band for the IPO was Rs 1,073-1,083 per share. At the top-end, the company will have market capitalisation of Rs 2,400 crore. Following the IPO, the promoter holding in the company will decline from 100 per cent to 79.2 per cent.
Most brokerages had recommended their clients to subscribe to the IPO citing reasonable valuations.
At the upper price band of Rs 1,083, the company was valued at 46 times its FY21 earnings on a diluted basis. Listed companies in the space trade at much richer valuations. Navin Fluorine International is valued at 74 times its FY21 earnings, while Alkyl Amines Chemicals is valued at 66 times, said a note by Marwadi Financial Services.