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Rossari Biotech makes stellar debut; lists at Rs 670 apiece, a 58% premium over its issue price

market | Jul 23, 2020 11:04 AM IST

Rossari Biotech makes stellar debut; lists at Rs 670 apiece, a 58% premium over its issue price

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The Rossari Biotech stock opened at Rs 670 on the BSE, up by Rs 245 over the issue price of Rs 425 per share, while on the NSE, it debuted at Rs 669.25, a 57.47 percent premium over its IPO price.

Rossari Biotech made a stellar debut on stock exchanges on Thursday with the specialty chemicals manufacturer's shares listing at Rs 670 apiece. The listing price is at about 58 percent premium from the issue price of Rs 425. The Rossari Biotech stock opened at Rs 670 on the BSE, up by Rs 245 over the issue price of Rs 425 per share, while on the NSE, it debuted at Rs 669.25.

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At 2:38 PM, the stock was trading 11 percent higher to Rs 741.10 per share on the NSE, 74 percent over its issue price.
It is the first company to hit the exchanges during the lockdown, after SBI Cards IPO in March. On July 15, the public issue, which consisted of a fresh issue of Rs 50 crore and an offer-for-sale (OFS) of 1.05 crore equity shares by promoters, closed with a massive 79.37 times subscription due to a strong response from investors.
The next initial public offering (IPO) in-line is Mindspace REIT IPO which will open on July 27. The price band of the issue is fixed at Rs 274-275.
Edward Menezes, Executive Chairman of Rossari Biotech said, “In the first 3 months of the lockdown we were at about 50-55 percent of our capacities. In July, the capacities were built up to 70 percent and we are sure that in the coming month it will cross the 80 percent mark. Our home, personal care and performance chemicals have been taking the lion share as the textile specialty chemicals were a bit slow in the month of April and May, however, it is picking up now, in July. We feel that the growth this year should be up almost 15 percent over last year.”
On the research and development spends, Sunil Chari, Managing Director said, “Our R&D spend is little less than 2 percent. We believe in our intelligent chemistry platform and just not on new molecule R&D. We focus on application development, and that is why as a company we started with no capital (Rs 7 lakh). To invest anything, we need to see a return on capital employed to be good and that is why we are prudent in spending money.”
Most brokerages recommended to 'subscribe' the issue earlier including Angel Broking, Anand Rathi and Choice Broking.
"There was a huge pent up demand for a primary offering as none had come in the last four months. This was a fresh company from a sector which already enjoys premium valuations and this company in particular had the added flavour of personal health and hygiene attached to it," market analyst Arun Kejriwal said.
"Sanitizers in COVID-19 became the icing on the cake and the subscription is testimony to the market response," he added.
All the net proceeds from the issue will be utilised for funding working capital requirements, repaying certain debt availed by the company and for general corporate purposes, said the company.
Rossari Biotech provides customised solutions to specific industrial and production requirements of customers primarily in the FMCG, apparel, poultry and animal feed industries, already has an installed capacity of 1,20,000 MTPA at Silvassa which was the only manufacturing facility.
 
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