Speciality chemicals maker Neogen Chemicals Ltd's initial public offering (IPO) was subscribed 41 times on the third and final day, thanks to high demand from investors across categories.
The public offering of nearly 4.33 million shares, excluding the anchor allotment, received bids for 177.9 million shares at close, stock-exchange data showed on Friday.
Neogen joins Polycab India Ltd in getting a thumping response from investors. Polycab’s Rs 1,345-crore IPO was covered 51.83 times earlier this month. The IPO’s success was followed by a strong market debut with Polycab shares rising more than 20%.
In Neogen’s IPO, the quota of shares reserved for retail investors was covered nearly 16 times while non-institutional investors such as corporate houses and affluent individuals bid for nearly 114 times the shares reserved for them.
Qualified institutional buyers bid for more than 30 times the shares reserved for them, data showed.
Neogen is targeting a valuation of as much as Rs 565 crore ($81.3 million).
The company raised Rs 39.70 crore ($5.7 million) on Tuesday from anchor investors including SBI Mutual Fund, Axis Mutual Fund, L&T Mutual Fund and Sundaram Mutual Fund by selling shares at the upper end of the Rs 212-215 price band.
The IPO comprises a fresh issue of shares worth Rs 70 crore and a secondary market sale of up to 2.9 million shares by promoters Haridas Thakarshi Kanani and Beena Haridas Kanani, according to the company's draft prospectus. The duo holds an 80.8% stake in the company.
Inga Advisors Pvt. Ltd and Batlivala & Karani Securities India Pvt. Ltd are managing Neogen’s IPO.
Neogen had filed its draft prospectus with the Securities and Exchange Board of India last November. It received SEBI's approval on 8 February this year.
The company will join a bunch of larger listed peers such as Aarti Industries Ltd, Atul Ltd, and Vinati Organics Ltd on the stock exchanges. In the broader chemicals sector, Blackstone-backed SH Kelkar & Co. Ltd, Shree Pushkar Chemicals & Fertilisers and Galaxy Surfactants Ltd have made stock market debuts over the past three years. Another specialty chemicals maker that went public last year was Fine Organics Industries Ltd.
Neogen Chemicals was founded in 1989 by chairman Haridas Kanani, an IIT-Bombay graduate. The company began business operations in 1991 at a factory at Mahape, Navi Mumbai. Thane-based Neogen also has a factory in Vadodara, Gujarat.
Neogen makes bromine- and lithium-based specialty chemicals. Over the years, it has expanded its range of products. It now makes 187 products, comprising 170 organic chemicals and 17 inorganic chemicals.