Shares of Laxmi Organic Ltd. gained on market debut after investors piled into the Rs 600-crore maiden offer, joining the IPO rush that extended into 2021.
The stock listed at Rs 156.2 apiece, a premium of 20.1% over the issue price of Rs 130, according to data available on the bourses. The scrip touched a high of Rs 162.05, gaining as much as 24% in the early trade on Thursday.
The three-day IPO, which opened March 15, was subscribed 106.7 times, led by non-institutional investors who bid 217 times the shares on offer. The institutional portion was subscribed 175 times, while the retail portion was subscribed close to 20 times.
The IPO saw promoters sell close to 17% of their total equity with their overall holding falling to 72.92% from 89.51% earlier.
The company intends to use the IPO proceeds for investment in its wholly owned subsidiary, Yellowstone Fine Chemicals Pvt., for part-financing its capital expenditure requirements, including setting up a manufacturing facility for fluorospecialty chemicals. That's besides funding capex needs for expansion of its specialty intermediates manufacturing facility and working capital requirements.
The company is among India's largest manufacturers of ethyl acetate with a market share of around 30%, according to brokerage estimates. That's expected to rise further completion of its acquisition of Yellowstone Chemicals Pvt.
Continued impact from Covid-19 risks, especially since most of its manufacturing facilities are in Maharashtra, and forex risks are some of the key concerns highlighted by the company.
Shares ended the day 26.62% higher at Rs 164.6. That compares to the 1.5% drop seen on the Nifty 50 index.
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