Aether Industries IPO: Issue subscribed 49% on Day 2

Specialty chemical company Aether Industries' initial public offering (IPO) has been subscribed 0.49 times (49%) on the second day of the issue launch. The employees' quota has received the highest bids and has been subscribed 0.93 times, followed by retail investors at 0.67 times, non-institutional investors (0.16 times) and qualified institutional buyers (0.39 times).

A total of 45,68,996 bids have been received for 93,56,193 shares offered to various categories of investors. A total of 27,03,903 bids have been received at the cut-off price of ₹642, the latest available data on the National Stock Exchange shows. In the unofficial and unregulated grey market, the Aether Industries shares are available at ₹10 premium, which is more than yesterday's premium of ₹4.

The company aims to use the IPO proceeds to fund greenfield projects in Surat, Gujarat, pay debt and fund its working capital requirements.

IPO details:

Aether Industries aims to raise close to ₹808 crore through the IPO, which will close on May 26. The IPO comprises a fresh issue worth ₹627 crore and an offer for sale of up to 2,820,000 equity shares (including an anchor portion of 37,42,495 shares) worth ₹181.04 crore.

The price band for the public issue has been fixed at ₹610-₹642 at the face value of ₹10 each. The bid lot has been fixed 23 equity shares and in multiples thereof at the equal number of minimum order quantity. The maximum subscription amount for a retail investor has been fixed at ₹2 lakh, while the maximum subscription amount for employees has been fixed at ₹5 lakh.

QIB investors can bid for the maximum quantity of 92,38,962 equity shares in a multiple of 23 equity shares, while NIB investors can bid for 64,90,738 equity shares in a multiple of 23 apiece.

Around 37,42,495 shares were allocated to anchor investors, garnering around ₹240.2 crore for the company. Of the total allocation of 37,42,495 equity shares, 18,22,313 equity shares (i.e. 48.69% of the anchor allocation) have been allocated to 6 mutual funds that applied through a total of 15 schemes.

Company financials:

Gujarat-based Aether Industries is a speciality chemical manufacturer in India that focuses on producing intermediates and speciality chemicals involving complex and differentiated chemistry and technology core competencies.

Its non-core assets as of December 31, 2021, stood at over ₹292 crore, while its current assets are worth ₹417 crore, totalling ₹709.5 crore. The company's total equity as of December 31, 2021, stood at ₹360 crore, while its liabilities were ₹349.2 crore. Its revenue during the period stood at ₹449.3 crore, while its expenses were at over ₹338 crore. Profit for the nine months ending December 31, 2021, stood at ₹82.9 crore.

Brokerages including Angel One, Hem Securities, Ventura Securities have recommended subscribe rating on the IPO, citing the growing chemical industry in India and diversified customer base of the company as prime reasons.