All eyes are set on Sigachi Industries IPO listing on Monday. The chemical manufacturing company will be listed on both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) at 10 am on November 15. Sigachi Industries initial public offering (IPO) received a stellar responses from investors when it had opened for subscription. Sigachi Industries IPO 101.90 times. Investors put in bids for 54.88 crore equity shares against the IPO size of 53.86 lakh equity shares. The qualified institutional buyers subscribed the issue 86.5 times while the portion set aside for retail investors was booked 80.47 times. HNI investors’ portion was subscribed 172.43 times. The strong response from the investors, robust financials, high premium in the grey market indicate a bumper listing for Sigachi Industries IPO on Monday.
Sigachi Industries IPO opened for subscription from November 1-3. Sigachi Industries garnered Rs 125.43 crore through its public issue, the smallest among the IPOs launched in financial year FY22. The funds proceed through the IPO will be used for the expansion of the production capacity for MCC at Dahej and Jhagadia in Gujarat. It will also help the company to manufacture croscarmellose sodium, a modified cellulose used as excipient, at Kurnool in Andhra Pradesh.
Sigachi Industries IPO GMP
Microcrystalline cellulose (MCC) manufacturer Sigachi Industries’ healthy financials, pan India market presence with comprehensive product portfolio attracted a lot of investors. Sigachi Industries IPO grey market premium recorded at Rs 220 on Sunday, November 14, according to the date available by the IPO watch. The unlisted shares of Sigachi Industries was trading at Rs 383, 135 per cent up over the higher end of the issue price.
Sigachi Industries Share Listing Gains on NSE, BSE
On much-awaited Sigachi Industries IPO listing, Manoj Dalmia, founder and director, Proficient Equities Limited said, “Listing price of Rs 393 (Rs 163 issue price+Rs 230 GMP) nearly 140 per cent gains. Recommendation-Expect strong listing gains, book profits if needed.”
“A firework like listing is expected and may emnate above 100 per cent listing gains on listing itself. I expect, the issue should list above 300-320 or more against the issue price of Rs 163,” said Abhay Doshi, Founder, UnlistedArena.com, dealing in Pre-IPO & Unlisted Shares.
“The only tiny sized issue amongst the mega IPOs has been successful in gaining huge interest from investors getting subscribed over 100x overall. Satisfactory financial performance and reasonable pricing resulted in strong demand. Due to small issue size it is expected that the company will list in T2T segment,” Doshi added.
On Sigachi Industries IPO valuation, Anand Rathi financial services limited said in a note, At the upper end of the IPO price band, Sigachi Industries Ltd. is offered at P/E of 15.1x its TTM earnings, with a market capitalization of Rs 5,011 million. Given that the company is one of the leading manufacturers of microcrystalline Cellulose in India with over 30 years of experience, pan India and international market presence, experienced management team and investment led future growth with high RoNW of 32.12 per cent in FY21 and reasonable valuation.
Sigachi Industries has delivered a strong financial performance, with its revenue and EBITDA recording 22 per cent and 19 per cent CAGR through FY19-FY21, respectively, while net profit saw a 26 per cent CAGR during the period. Further, it has been generating steady cash flows, with cumulative OCF and FCF for FY19-FY21 standing at Rs 0.56 billion and Rs 0.35 billion, respectively. Balance sheet also looks strong, with net D/E as of FY21 at a mere 0.03x. Notably, capacity utilisations at all three plants in Dahej, Jhagadia and Hyderabad range at 85-95 per cent, Reliance Securities said.
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