Sigachi Industries Ltd initial public offering (IPO), which opened on Monday subscription, has seen strong demand. The issue will conclude on 3 November, along with two other issues of Policybazaar and SJS Enterprises. The company has set price band of ₹161-163 a share for its three-day share sale. In the grey market, Sigachi shares were commanding a premium of ₹150.
On Day 1, the initial public offer of microcrystalline cellulose manufacturer Sigachi Industries received 9.52 times subscription. Qualified institutional buyers (QIBs) category received 57 per cent subscription, while that of non institutional investors 4.44 times and retail individual investors (RIIs) 16.81 times.
“When the D-Street is busy witnessing some giant startup IPOs, the tiny sized IPO too is preparing for its debut. Sigachi is one of the leading manufacturer of MCC. The financial performance looks satisfactory with revenues growing at a CAGR of 22% in last three years. Good top & bottom line growth has been recorded. On the upper band of the issue, the demanding P/E of over 13x looks reasonable. Reasonable pricing and tiny issue size should ensure huge fancy which in turn will lead to heavy subscription," said Abhay Doshi, founder, UnlistedArena.com.
The IPO of the Hyderabad-based manufacturer of cellulose-based excipients, consists of a fresh issue of 7.70 million shares up from earlier planned of up to 2.84 million shares. On the upper end price band, the firm will raise as much as ₹125 crore through its share sale.
As per market observers, Sigachi shares are available at a premium (GMP) of 150 in the grey market today. The firm is planning to list on 11 November on leading stock exchanges BSE and NSE.
The Hyderabad-based firm is engaged in the manufacturing of Microcrystalline Cellulose (MCC) which is widely used as an excipient for finished dosages in the pharmaceutical industry and has varied applications in food, nutraceuticals, and the cosmetic industries.
It carries out its operations from three manufacturing units situated at Hyderabad, Jhagadia, and Dahej in Gujarat.
The proceeds from the issue will be used for expansion of production facilities of MCC at Dahej and Jhagadia in Gujarat. The expansion will add 3,600 MTPA capacity to the Dahej and Jhagadia facility, augmenting its capacity to 7,890 MTPA and 5,760 MTPA, respectively.
