On the second day, the NSE data showed that Aether IPO received cumulative bids of 45,68,996 equity shares against the offered size of 93,56,193 equity shares - subscribing by 49%.
The portion kept for retail individual investors subscribed by 67% against the reserved size, while the portion for non-institutional investors (NII) subscribed by merely 16% against the reserved size. Whereas the qualified institutional buyers received a subscription of 39% against the reserved portion.
Of the total IPO size - 50% of the portion will be allocated to qualified institutional buyers (QIBs), while 15% will be kept for non-institutional investors (NIIs), and the remaining 35% will be reserved for retail individual investors (RIIs).
The company plans to raise ₹808 crore from the IPO. The issue includes a fresh issue of ₹627 crore and an offer for sale of up to 28.2 lakh shares by promoter Purnima Ashwin Desai.
Siddhant Khandekar and Dhavan Shah, Research Analysts at ICICI Direct in their research note said, "Aether Industries is a niche player in the speciality chemical business and enjoys dominating market share in few select products with high margins. That said, at the upper price band, it is valued at ~58.9x EV/EBITDA and ~72.4x P/E for 9MFY22 (annualised), which looks demanding."
"The IPO can be AVOIDED due to stretched valuation," the duo said.
As per the analysts, key risks and concerns for Aether are:
- Derives a major chunk of revenues from marquee customers without having long term contracts with all of these customers.
- Dependency on certain industries for a significant portion of sales.
- Dependency on certain export incentives.
However, Ventura in its report said, "At the IPO price of ₹642, AETHER is valued at 32.2X FY24 P/E. Considering the growth opportunities for speciality chemicals in pharma, agrochemicals & FMCG space, and improving prospects for contractual manufacturing & CRAMS under Make-in-India initiatives, we recommend a SUBSCRIBE rating with a price target of ₹797, which represents an upside of 24% over the IPO price in 18 months."
