Despite the uncertain global environment, India’s primary market continues to see a spurt in IPO activities, both in terms of volume and proceeds, amid ample liquidity in the market hastened by foreign fund inflows and hopes of slower interest rate hikes coupled with healthy corporate earnings. Banking on the market exuberance, as many as four companies have launched their initial public offering (IPO) so far this month as promoters tend to cash in on the recent rally in domestic equities. The equity benchmarks the BSE Sensex and the NSE Nifty have gained nearly 15% in the last five months, driven by rally in the IT, energy, FMCG, and metal stocks as well as foreign fund inflows despite rate hikes by central banks globally.
Archean Chemical Industries is the latest company to launch its public offering, which will hit the primary market on November 9. This is the fifth company, after DCX Systems, Fusion Micro Finance, Global Health (Medanta), and Bikaji Foods International, which will open for public subscription this month. Small business and mortgage loans provider, Five Star Business Finance has also announced to launch its ₹1,960 crore IPO on November 9. Both Archean Chemical and Five Star Business Finance will have the same opening and closing dates.
Marine chemical manufacturer Archean Chemical will launch its ₹1,462 crore IPO on November 9, which is a mix of fresh issue of equity shares and an offer-for-sale (OFS). The company, one of the largest exporters of bromine and industrial salt, plans to raise ₹805 crore by issuing fresh equities and remaining capital via OFS of up to 1.61 crore shares by the promoter and investors, including the India Resurgence Fund, a joint venture between the Piramal Group and Bain Capital.
Here are 10 important things to know about Archean Chemical IPO:
The three-day IPO of Archean Chemical Industries, a speciality marine chemical manufacturer in India, opens on November 9 and closes on November 11.
The price band for the IPO of ₹386-407 per share. At the upper end of the price band, the IPO is expected to fetch ₹1,462.3 crore.
The issue comprises fresh issues worth ₹805 crore and OFS of up to 1.61 crore shares by the promoter and investors.
Promoter Chemikas Speciality will sell 20 lakh shares via OFS, while the remaining 1.41 crore shares will be offloaded by investors Piramal Natural Resources, and India Resurgence Fund Scheme I and Scheme II.
The lot size is 36 shares and in multiples thereof, which means retail investors can make a minimum investment of ₹14,652 per lot and a maximum of ₹1,90,476 per 13 lots.
Up to 75% of the IPO is reserved for qualified institutional investors, 15% for non-institutional investors, and the remaining 10% for retail investors.
The company is likely to finalise the IPO share allotment by November 16, and its shares are expected to be listed on the BSE and the NSE on November 21.
The company intends to use funds raised through its fresh issue for redemption, non-convertible debentures, and general corporate purposes.
For the June quarter, the company posted a profit after tax of ₹84.41 crore, while revenue stood at ₹408.82 crore.
IIFL Securities, ICICI Securities, and JM Financial are the book-running lead managers to the issue, whereas Link Intime India is the registrar to the issue.