Speciality chemicals maker Neogen Chemicals Ltd made a strong debut on the stock exchanges on Wednesday as its shares rose more than 16% from the issue price and inched higher.
Shares of Neogen began trading on the BSE at Rs 251 compared with the initial public offering price of Rs 215 apiece, stock-exchange data showed. The stock touched a high of Rs 263.55 in the opening few minutes of trade.
Neogen is the seventh company to list on the main board of the stock exchanges this year. Two of the previous six companies have made strong debuts while two tanked and two others ended flat after losing initial gains.
The chemicals company's strong debut follows an IPO that was covered 41 times.
The gains buck the recent weakness and volatility in the secondary market. The BSE Sensex was down 0.6% in morning trade. The 30-share benchmark has fallen nearly 4% from its all-time highs on 18 April.
Neogen now commands a market valuation of Rs 607 crore compared with the Rs 565 crore it had sought in the IPO.
Inga Advisors Pvt. Ltd and Batlivala & Karani Securities India Pvt. Ltd managed 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 joins 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.