Archean Chemical makes stellar debut; surges up to 17% post listing
Speciality marine chemical manufacturer Archean Chemical Industries made a strong debut on the domestic bourses on Monday, with the share price listing at ₹450, a premium of 10.56% against its issue price of ₹407 per share on the National Stock Exchange (NSE). On the BSE, the stock opened at ₹449, up 10.3% against the upper price band of the initial public offer (IPO) issue price of ₹407 apiece, in an otherwise weak broader market.
Post listing, the stock gained as much as 17% to hit a high of ₹476.05 on the BSE, whereas it hit a high of ₹476 on the NSE. The market capitalisation surged to ₹5,568.76 crore, with a total of 1,61,16,856 crore changing hands over the counter on the BSE and the NSE.
At 11:35 am, Archean Chemical shares were quoting at ₹452, while the BSE benchmark Sensex was trading 431 points lower at 61,232 levels.
The strong listing of Archean Chemical, India's largest exporter of bromine and industrial salt, was in line with D-Street expectations as the stock of the chemical manufacturer was commanding a grey market premium (GMP) of ₹124 ahead of the listing. The company’s ₹1,462 crore IPO had received an overwhelming response from investors as the issue was subscribed 32.23 times, led by qualified institutional buyers (QIBs). The portion reserved for QIBs was booked 48.91 times, while that of high net worth individuals (HNIs) was subscribed 14.90 times. The quota allotted for the retail portion received 9.96 times bids. The company had reserved 75% of the issue for QIBs, 15% for non-institutional investors, and the remaining 10% for retail investors.
The three-day IPO of Archean Chemical, with a price band for the IPO of ₹386-407 per share, opened for subscription between November 9 and November 11. The issue includes a fresh issue worth ₹805 crore and offer-for-sale (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. The lot size was 36 shares and in multiples thereof, which means retail investors could make a minimum investment of ₹14,652 per lot and a maximum of ₹1,90,476 per 13 lots.
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Ahead of the IPO, the company raised ₹658 crore from 42 anchor investors at ₹407 per equity share. The anchor investors that participated in the pre-IPO rounds include foreign investors such as Abu Dhabi Investment Authority, Government Pension Fund Global, Societe Generale, and BNP Paribas. Among domestic investors, Kotak Fund, Motilal Fund, Tata Mutual Fund, SBI Mutual Fund, Nippon India Fund, ICICI Prudential, HDFC Mutual Fund, Goldman Sachs Fund, Ashoka India Opportunities Fund, DSP Fund, IIFL Funds, and others participated in the bid.
The homegrown marine chemical manufacturer 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 were the book-running lead managers to the issue, whereas Link Intime India was the registrar to the issue.