Tatva Chintan Pharma's ₹ 500 crore initial public offering (IPO) was subscribed 180.36 times on the third and final day of the issue today, according to subscription data on the stock exchanges. The IPO of the specialty chemical company opened for investors on Friday, July 16, and closed today, July 20. The portion reserved for non-institutional investors (NII) was subscribed the most today, while retail investors showed tepid interest. (Also Read: Tatva Chintan Pharma IPO Opens Today; Here Are Things To Know )
The portion reserved for retail individual investors in the IPO was subscribed 35.35 times by 5:00 pm today. The portion set aside for the qualified institutional buyers (QIB) was subscribed 185.23 times, while the portion reserved for non-institutional investors (NII) was subscribed 512.22 times - the highest among the three groups of investors.
Tatva Chintan Pharma's IPO consists of a fresh issue of shares worth ₹ 225 crore and an offer of sale aggregating to ₹ 225 crore by the existing promoters and shareholders. The shares were offered in the price band of ₹ 1,073-1,083 per share. Investors could apply for a minimum one lot of 13 shares and in multiples thereafter, extending up to a maximum of 14 lots.
The chemical manufacturing company will utilise the IPO proceeds to fund its capital expenditure requirements, expand its Dahej manufacturing facility, upgrade the R&D facility in Vadodara, as well as for general corporate purposes.
"Tatva Chintan Pharma has reported a good growth in topline (CAGR of 26 per cent) over the last three years, backed by expansion in its product portfolio due to R&D initiatives. The company's net profit has also expanded at a healthy run-rate of 57.4 per cent over the last three years. The company has also reported healthy margins and return ratios. Tatva Chintan's margins have also expanded over the last three years. It is the largest and only commercial manufacturer of SDAs for zeolites in India. It also enjoys the second-largest position globally.
At the higher end of the price band, Tatva Chintan is reasonably priced at a P/E ratio of 49.5 times FY21 EPS (on a fully diluted on post-issue basis). This is lower as compared to peers such as Fine Organics (75 times), Vinati Organics (77 times) and Navin Fluorine (73 times). Tatva Chintan has also reported higher RoNW numbers than these peers.
Given factors such as good growth in bottomline, healthy margins, robust return ratios, good growth visibility, leadership position, and reasonable valuations, we remain positive on the prospects of this issue," SEBI-registered investment advisor INDmoney said in a report.