Archean Chemical Industries signs up for 10% premium amid falling markets

  • Archean Chemical Industries shares are listed at ₹449 against the allotment price of ₹407 per share.
  • Overall, the IPO generated strong demand from investors in volatile market conditions, having been subscribed 32.54 times.
  • The market capitalization of the company stood at ₹5,525 crore.

Shares in specialty chemical company Archean Chemical Industries are listed at ₹449 per share against the issue price of ₹407 on Monday.

The stock debuted at a 10% premium on the exchanges. However, this is well below gray market expectations which called for a 30% premium. GMP is the premium at which IPO shares are traded on an unofficial market before being listed on a stock exchange.

Stock markets fell in early trading as the Sensex fell 463 points and Nifty fell 129 points.

The company’s market capitalization stands at ₹5,525 crore, according to BSE data.

The IPO had received strong demand from investors in volatile market conditions, as it was subscribed 32.54 times.

The qualified institutional buyer part was massively subscribed 48.58 times. The share reserved for non-institutional investors experienced a subscription of 15.35 times. The retail part also saw good demand with 10.25 times the subscription.

This year, 26 IPOs debuted on the ESB motherboard. Most of them gave positive sign-up wins, except for seven numbers. Here are the top five IPOs with the highest listing gains in 2022.

Companies Highest listing earnings per share
Harsha Engineers International ₹155.90
Dream People Services ₹136.65
Ether Industries ₹134.75
DCX systems ₹101.80
Syrma SGS Technology ₹93.05

(Source: BSE)

Manufacturer of ‘Potash Sulphate’
The company is a specialist marine chemical manufacturer in India, which focuses on the production and export of bromine, industrial salt and sulphate of potash to customers across the globe.

It also exports them to countries like China, Japan, South Korea, Qatar, Belgium and the Netherlands. In FY22, it exported to 18 global customers in 13 countries.

The majority of the company’s sales come from selling to Chinese companies. As of FY22, 36.3% of its revenue comes from China, 29.68% from India, 19.46% from Rest of Asia, 6.23% from Japan, 5.62% from South Korea South, 1.79% from Africa and 0.92% from Europe.

The company said in the draft SEBI filing that it faces pricing pressure from overseas companies that make products at cheaper prices. “We are facing price pressure from foreign companies, mainly in Israel (Dead Sea region), China and North America, who are able to produce chemicals at competitive costs and , therefore, can provide their products at cheaper prices,” the company said in its statement. Herring Prospectus (RHP).

The company’s profitability more than doubled to ₹188 crore in FY22 from ₹66 crore in FY21.

Details Exploitation product Profit EBITDA margin
EX22 ₹1,130 crore ₹188,000,000 42.24%
FY21 ₹740crore ₹66,000,000 37.29%
FY20 ₹608crore ₹ -36,000,000 25.79%

Source: HPR

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