Prasol Chemicals IPO has entered its first day of bidding on Tuesday, 8 September. The ₹500 crore IPO will remain open till 10 September.
The shares of Prasol Chemicals are trading at a grey market premium (GMP) of ₹55 today, suggesting a potential listing gain of nearly 8% over the upper end of the IPO price band.
Ahead of its IPO launch, Prasol Chemicals raised nearly ₹150 crore from anchor investors on Monday. According to a circular uploaded on the BSE website, the company allotted 22.19 lakh equity shares to anchor investors at ₹676 per share, taking the total allocation to ₹149.99 crore.
The anchor investors comprised Aditya Birla Sun Life Insurance Company, Tata AIA Life Insurance Company, Turnaround Opportunities Fund, ITI Mutual Fund, Tata Mutual Fund, Edelweiss Mutual Fund and Kotak Mahindra Mutual Fund.
Prasol Chemicals IPO subscription status
The bidding for Prasol Chemicals IPO will begin at 10 am on Tuesday, 8 September.
Prasol Chemicals IPO review
Brokerage firm Anand Rathi has given ‘subscribe – long-term’ rating to the Prasol Chemicals IPO, saying that the company is seeking a P/E of 48x times, and a post-issue market capitalization of approximately ₹40,008 million, making the issue appears to be fully priced.
“Their business is dependent on manufacturing facilities wherein unplanned shutdown happens creating disruption in operational activities. Overall strong product depth, R&D-led innovation and a diversified global customer base position the company well to capture long-term growth opportunities in specialty chemicals. Hence, we assign a Subscribe for Long Term rating for the issue,” the firm said.
The firm further said that the company’s specialty chemicals business benefits from high entry barriers, driven by lengthy 1–4 year customer approval cycles, complex chemistry, high product-development costs and stringent regulatory requirements. These factors create significant customer stickiness and make displacement of established suppliers difficult, supporting long-term revenue visibility and competitive positioning.
Meanwhile, brokerage firm SBI Securities has also given ‘subscribe for long-term’ rating to the IPO, saying that the company has recorded Revenue/EBITDA/Adj. PAT CAGR of 18.6%/51.7%/97.8% respectively over the FY24- FY26 period.
“At the upper price band of ₹676, the issue is valued at FY26 P/E multiple of 48.1x based on post-issue capital. Upon comparing with peers, the issue appears to be reasonably valued alongside relatively better return ratios. We recommend investors to SUBSCRIBE to the issue for long-term investment horizon,” it said.
Prasol Chemicals IPO details
The public issue consists of a fresh issue of equity shares aggregating up to ₹80 crore, along with an offer for sale (OFS) of shares worth up to ₹420 crore by existing shareholders.
Prasol Chemicals has fixed the IPO price band at ₹643– ₹676 per share, with a lot size of 22 shares. At the upper end of the price band, retail investors will need to invest a minimum of ₹14,872 for one lot.
The company intends to utilise the proceeds from the fresh issue for repaying debt, meeting working capital requirements and other general corporate purposes.
Dam Capital Advisors Ltd. is acting as the book-running lead manager for the issue, while Kfin Technologies Ltd. has been appointed as the registrar.
Prasol Chemicals was initially incorporated in 1992 as Prachi Poly Products Pvt Ltd. The company was renamed Prasol Chemicals in 2007 and was subsequently converted into a public company in 2022.
The company is a forward-integrated manufacturer of acetone and phosphorus-based speciality chemicals. It also produces a range of other speciality chemicals that involve complex and differentiated chemistries.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.