The share allocation in Laxmi Organic IPO, which was subscribed 107 times and closed last week, has been finalised today. Link Intime India Private, the registrar of the issue, will manage share allocation and refund. Once finalised, investors can check their application status on the website of Link Intime India.
The IPO of speciality chemicals manufacturer Laxmi Organic Industries was s open between March 15 and March 17 and the price range was fixed at ₹129-130 per share. The retail segment was subscribed 20 times, qualified institutional buyers (QIBs) 175.43 times and non institutional investors 217.62 times. 35% of the issue has been reserved for retail investors, 50% for qualified institutional buyers, and the rest for non-institutional bidders.
Recent issues of other specialty chemical companies like Rossari Biotech and Chemcon Specialty Chemicals had also seen a strong response from investors. Laxmi Organics Industries which is into manufacturing of Acetyl Intermediates and specialty intermediates.
Laxmi Organic IPO comprised a fresh issue of up to ₹300 crore and an offer for sale of up to ₹300 crore.
Laxmi Organic Industries plans to utilise the net proceeds from the issue for setting up a manufacturing facility for fluorospecialty chemicals, working capital requirement, and for the purchase of plant and machinery for augmenting infrastructure development.
For fiscal year ended March 2020, Laxmi Organic posted a rise of 1.07% in net profit to ₹78.62 crore against ₹77.79 crore for fiscal ended March 2019. Revenue from operations fell 4.91% to ₹1358.69 for financial year 2020 over ₹1428.80 crore for financial year 2019.
Ahead of the IPO, the company had garnered ₹180 crore from anchor investors.
"At higher price band of Rs. 130, the company is demanding a P/E valuation of 77.2x (to its restated FY20 EPS of Rs. 1.7), which is at a significant premium to the peer average of 43.4x. However, if we annualize the H1 FY21 EPS, the demanded valuation P/E comes out to be 37.7 times. Considering the historical performance, the issue seems to be aggressively priced. Thus we assign a “Subscribe with Caution" rating for the issue," Choice Broking had said in a note.
