Clean Science and Technology’s Rs 1,546 crore initial public offering (IPO) was subscribed 93.41 times on the third and final day of the issue, according to subscription data on the exchanges. The Pune-based specialty chemicals company’s IPO is entirely an offer for sale (OFS) by existing investors and will not involve a fresh issue of shares. The IPO was subscribed 4.28 times on the second day of the issue yesterday – July 8.
The portion reserved for retail investors in the IPO was subscribed nine times on July 9 by 5:00 pm. The non-institutional investors (NII) showed an overwhelming interest as the portion set aside for them was subscribed 206.43 times, while the portion reserved for qualified institutional buyers (QIB) was subscribed 156.37 times.
Clean Science and Technology IPO opened for subscription on Wednesday, July 7, and closed today – Friday, July 9, remaining open for investors for a period of three days. The company had fixed the price band of its primary market sale at Rs 880-900 per share. The chemical specialty company will not receive any funds from the public issue as it is entirely an offer for sale.
The promoters who will be offloading stake in the firm include Krishnakumar Ramnarayan Boob, Ashok Ramnarayan Boob, Parth Ashok Maheshwari, and Siddhartha Ashok Sikchi.
”At the higher end of the price band, Clean Science IPO is reasonably priced at a P/E ratio of 48.2 times FY21 EPS (fully diluted on post-issue). This is lower as compared to peers such as Fine Organics (76 times), and Vinati Organics (68 times).
The global chemicals market was valued at $ 4,738 billion in 2019 with China accounting for 40% of the market share. The global chemicals market is expected to grow at a CAGR of 6.2 per cent from 2019 to 2025 and will be $ 6,785 in 2025. This gives very good growth visibility for Clean Science and Technology.
Given factors such as strong growth in bottomline, healthy margins, robust return ratios, good growth visibility, diversified business, and reasonable valuations, we remain positive on the prospects of this issue,” SEBI-registered Investment Advisor INDmoney said in a report.
Domestic brokerage firm Anand Rathi maintained a ‘subscribe’ rating for the IPO.
”Clean Science and Technology, a family-owned firm, is among the few companies globally focused entirely on developing newer technologies using in-house catalytic processes, which are eco-friendly and cost-competitive.
The company is available at the upper end of the IPO price band, it is offered at 48.2x its FY21 earnings, with a market cap of Rs. 95,597 million.
”….On FY21 earnings basis, the company is trading below the industry average of 55.4x. The company possesses a healthy balance sheet and robust return ratio profile (FY21 RoE at 36.8 per cent). We recommend a “Subscribe” rating to this IPO,” said Anand Rathi in its note.