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Advanced Enzyme shares soar 35% on listing after blockbuster IPO

01 August, 2016

Advanced Enzyme Technologies Ltd made a strong stock market debut on Monday with its shares listing at a 35% premium to the issue price after the second-biggest initial public offering in India by subscription in eight years.

Shares of the enzymes manufacturer listed on the BSE at Rs 1,210 apiece compared with the IPO price of Rs 896. The shares traded between Rs 1,242.75 and Rs 1,168.55 before closing at Rs 1,178.30, giving the company a market value of Rs 2,630 crore ($392 million). The 30-stock benchmark BSE Sensex fell 0.2% after gaining earlier in the day.

Advanced Enzyme joins a string of companies that have made spectacular market debuts over the past year. In the healthcare sector, diagnostics firm Thyrocare surged on its listing day in May while Dr Lal PathLabs Ltd, drugmaker Alkem Laboratories Ltd and hospital chain Narayana Hrudayalaya Ltd also made strong debuts on the bourses.

The enzyme maker’s IPO of 3.23 million shares was subscribed almost 116 times. This trailed only Quess Corp Ltd’s IPO in terms of investor interest since 2008.

Shares of Quess Corp had climbed 57% on debut.

Advanced Enzyme’s IPO was covered 89% on the first day and 4.3 times on the second day.

India’s IPO market has seen significant momentum in the past couple of months thanks to a rebound in the secondary markets. Market volatility in the first half of this year had forced several firms to skip their planned share sales, but the massive response to Quess Corp and Advanced Enzyme will offer hope to many companies looking to float IPOs.

Advanced Enzyme’s IPO comprised a fresh issue to raise Rs 50 crore and an offer for sale of about 4 million shares by its promoters, Kotak Private Equity and other shareholders. The total issue size was about Rs 412 crore at the upper end of the price band of Rs 880-896 a share.

The company had filed its draft red herring prospectus for the IPO with capital markets regulator Securities and Exchange Board of India in January. It received SEBI approval in early May. ICICI Securities and Axis Capital managed the issue.

Advanced Enzyme researches, develops, makes and sells about 400 proprietary products developed from 60 indigenous enzymes. It says it ranks among the top 15 global companies in terms of enzyme sales, and has the second-highest market share domestically, next only to the world leader Novozymes.

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Advanced Enzyme shares soar 35% on listing after blockbuster IPO

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