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Neogen Chemicals shares list at 17% premium over issue price

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Neogen Chemicals has made a strong stock market debut on Wednesday, listing at a  21 percent premium over its issue price.

Neogen Chemicals shares list at 17% premium over issue price
Neogen Chemicals has made a strong stock market debut on Wednesday, listing at a 17 percent premium over its issue price. Neogen Chemicals shares opened at Rs 251 per share on the BSE, up 16.7 percent from the issue price of Rs 215 per share. Intraday, the stock rose to Rs 263.55 per share, up 22.5 percent from its issue price.
At 10.40 AM, the stock price was trading at 22.5 percent up Rs 263.55 per share, while the Sensex was down 0.66 percent at 38,023.45.
Neogen Chemicals IPO was open for subscription from April 24-26, with a price band of Rs 212-215 per share.
On its final day of bidding, the IPO received a good response from the investors and was subscribed 41.14 times. Post the IPO issue, the promoters’ shareholding will be at 70 percent and public shareholding will be at 30 percent.
Brokerage firms had mixed recommendations on the company. Anand Rathi recommended ‘Subscribe’ considering the company’s ability to grow profitably and command better return ratios.
It said, "Neogen Chemicals has an installed capacity for 1,30,400 litres of organic chemicals with capacity utilisation of 64 percent. The company plans to double capacity to ~256,000 liters and 2,400 tons of organic and inorganic chemicals to cater to mounting demand."
While Choice Broking Research recommended ‘avoid’ for the IPO as it is valued at a P/E multiple of 47.8x which is at a premium to its peer average of 38.8x.
Considering its historical growth profile, proposed expansion activities and the demanded valuations we feel that the issue is fully priced, said the brokerage firm.
Based on the product profile there is no apple-to-apple comparison between the company and its peers. The issue size (around Rs. 1,300 million) being lower than Rs 2,500 million, the shares will be listed in “T” group, there will be some restrictions on the price movements, it further added.
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CompanyPriceChng%Chng
JSW Steel705.80 -11.75 -1.64
Maruti Suzuki7,219.00 -74.85 -1.03
SBI425.55 -3.35 -0.78
Reliance2,090.60 -15.10 -0.72
Wipro595.05 -4.10 -0.68
CompanyPriceChng%Chng
Maruti Suzuki7,217.60 -72.60 -1.00
SBI425.55 -3.60 -0.84
Reliance2,091.00 -14.20 -0.67
HDFC2,470.00 -14.10 -0.57
HUL2,349.00 -10.25 -0.43

Currency

CompanyPriceChng%Chng
Dollar-Rupee74.45500.05500.07
Euro-Rupee87.70100.09500.11
Pound-Rupee102.38200.07000.07
Rupee-100 Yen0.67500.00200.30