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Speciality chemicals maker Neogen Chemicals' IPO fully subscribed on day 2
Photo Credit: VCCircle

Speciality chemicals maker Neogen Chemicals Ltd's initial public offering (IPO) was fully subscribed on the second day led by bids from retail individuals and institutional investors.

The public offering of nearly 4.33 million shares, excluding the anchor allotment, received bids for 5.275 million shares. The overall book was subscribed 1.21 times at the end of day two, stock-exchange data showed.

The quota of shares reserved for retail investors was covered nearly two times, while non-institutional investors such as corporate houses and affluent individuals bid for nearly 40% of the shares reserved for them.

Qualified institutional buyers (QIBs) bid for 64% of the shares reserved for them, data showed.

The IPO crossed the one-fourth mark at the end of day one led by retail investors.

Neogen, whose IPO will close on Friday, 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 as part of the anchor allotment.

Indian asset management companies such as SBI Mutual Fund, Axis Mutual Fund, L&T Mutual Fund and Sundaram Mutual Fund bought Neogen’s shares at the upper end of the Rs 212-215 price band per share.

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 together hold 15.2 million shares, or 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.

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