Kronox Lab IPO subscribed over 43 times on Day 3 so far; QIB portion booked about 116x
Vadodara-based Kronox Lab Science is selling its shares in the price band of Rs 129-136 apiece. Investors can apply for a minimum of 110 shares and its multiples thereafter.
- Jun 5, 2024,
- Updated Jun 5, 2024 1:11 PM IST
The initial public offering (IPO) of Kronox Lab Sciences continued to receive a strong response from the investors during the third and final day of the bidding process, thanks to bumper interest from HNI investors. The issue was subscribed about 8 times during the first day, while it ended day two with nearly 25 times.
The Vadodara-based Kronox Lab Science is selling its shares in the price band of Rs 129-136 apiece. Investors can apply for a minimum of 110 shares and its multiples thereafter. It is looking to raise Rs 130.15 crore via IPO, which is entirely an offer-for-sale (OFS) of 95,70,000 equity shares.
According to the data, the investors made bids for 29,11,42,720 equity shares, or 43.46 times, compared to the 66,99,000 equity shares offered for the subscription by 12.45 pm on Wednesday, June 05. The three-day bidding, which opened on Monday, June 03, concludes today.
The allocation for qualified institutional bidders (QIBs) was subscribed 4.51 times, while the portion reserved for non-institutional investors saw a subscription of 115.86 times. However, the quota set aside for retail investors attracted bids for 34.69 times of their reservation as of the same time.
Kronox Lab Sciences is a manufacturer of high-purity specialty fine chemicals for diverse end-user industries. Its high purity specialty fine chemicals are used in various industries including manufacturing APIs, pharma formulations, scientific research, nutraceuticals, biotech, agrochemical, personal care , metal refineries, and animal health care.
The grey market premium of Kronox Lab Sciences has nearly halved in the last couple of days amid the rising volatility. Last heard, the company was commanding a premium of Rs 45-50 in the unofficial market, suggesting a listing pop of about 33-36 per cent for the investors. However, the premium in the grey market stood around Rs 85-90 on Monday.
Analysts, those tracking the issue, are mostly positive on the back of sound fundamentals, strong moats, positioning for the growth opportunities and solid relationships with customers across the globe. However, forex fluctuations, maintenance of large portfolios, regulatory issues and geopolitical tensions are key concerns for the company.
Kronox Lab Sciences is well positioned in the specialty fine chemicals industry with a wide product portfolio and diversified end-user industries. Exclusive products generating high margins and significant export presence, lead them to better performance compared to peers and maintaining their strong position against the industry headwinds, said Arihant Capital Markets.
"Going forward, the company has plans for major capacity expansion at their newly acquired land which will improve the product portfolio and help in reaching out to newer customers and geographies with new and existing products. At an upper band price of Rs 136, the company is valued at P/E of 24.46 times based on FY24 EPS of Rs 5.56," it added with a 'subscribe' rating.
Ahead of its IPO, Kronox Lab raised Rs 39.05 crore from six anchor investors it allocated 28.71 lakh shares at an issue price of Rs 136 apiece. It has reserved a 50 per cent of the net offer for the qualified institutional bidders (QIBs), while non-institutional investors (NIIs) shall be allocated 15 per cent of the net offer. Retail investors have 35 per cent shares reserved from them.
Kronox Lab Science Ltd manufactures high purity speciality fine chemicals of various grades for diversified end user industries. The Company has a global footprint of exports to over 20 countries. The company faces competition primarily from domestic and international companies, said Hensex Securities, with a 'subscribe' rating on the IPO.
The brokerage has cited dependence on select clients, operating in a manpower intensive industry. It may face manpower and niche demand as the key concerns for the company. "The company supplies products in limited quantities and for specific use by application industries thus any changes in the requirement of its products may affect the business," Hensex said.
For the nine months ended on December 31, 2023, Kronox Labs Sciences reported a net profit of Rs 15.46 crore with a revenue of Rs 68.44 crore. The company's bottomline came in at Rs 16.62 crore with a revenue of Rs 97.50 for the financial year 2022-23.
Pantomath Capital Advisors is the book running lead manager of the Kronox Lab Sciences IPO, while Kfin Technologies is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE with June 10 as the tentative date of listing of shares on the bourses.
The initial public offering (IPO) of Kronox Lab Sciences continued to receive a strong response from the investors during the third and final day of the bidding process, thanks to bumper interest from HNI investors. The issue was subscribed about 8 times during the first day, while it ended day two with nearly 25 times.
The Vadodara-based Kronox Lab Science is selling its shares in the price band of Rs 129-136 apiece. Investors can apply for a minimum of 110 shares and its multiples thereafter. It is looking to raise Rs 130.15 crore via IPO, which is entirely an offer-for-sale (OFS) of 95,70,000 equity shares.
According to the data, the investors made bids for 29,11,42,720 equity shares, or 43.46 times, compared to the 66,99,000 equity shares offered for the subscription by 12.45 pm on Wednesday, June 05. The three-day bidding, which opened on Monday, June 03, concludes today.
The allocation for qualified institutional bidders (QIBs) was subscribed 4.51 times, while the portion reserved for non-institutional investors saw a subscription of 115.86 times. However, the quota set aside for retail investors attracted bids for 34.69 times of their reservation as of the same time.
Kronox Lab Sciences is a manufacturer of high-purity specialty fine chemicals for diverse end-user industries. Its high purity specialty fine chemicals are used in various industries including manufacturing APIs, pharma formulations, scientific research, nutraceuticals, biotech, agrochemical, personal care , metal refineries, and animal health care.
The grey market premium of Kronox Lab Sciences has nearly halved in the last couple of days amid the rising volatility. Last heard, the company was commanding a premium of Rs 45-50 in the unofficial market, suggesting a listing pop of about 33-36 per cent for the investors. However, the premium in the grey market stood around Rs 85-90 on Monday.
Analysts, those tracking the issue, are mostly positive on the back of sound fundamentals, strong moats, positioning for the growth opportunities and solid relationships with customers across the globe. However, forex fluctuations, maintenance of large portfolios, regulatory issues and geopolitical tensions are key concerns for the company.
Kronox Lab Sciences is well positioned in the specialty fine chemicals industry with a wide product portfolio and diversified end-user industries. Exclusive products generating high margins and significant export presence, lead them to better performance compared to peers and maintaining their strong position against the industry headwinds, said Arihant Capital Markets.
"Going forward, the company has plans for major capacity expansion at their newly acquired land which will improve the product portfolio and help in reaching out to newer customers and geographies with new and existing products. At an upper band price of Rs 136, the company is valued at P/E of 24.46 times based on FY24 EPS of Rs 5.56," it added with a 'subscribe' rating.
Ahead of its IPO, Kronox Lab raised Rs 39.05 crore from six anchor investors it allocated 28.71 lakh shares at an issue price of Rs 136 apiece. It has reserved a 50 per cent of the net offer for the qualified institutional bidders (QIBs), while non-institutional investors (NIIs) shall be allocated 15 per cent of the net offer. Retail investors have 35 per cent shares reserved from them.
Kronox Lab Science Ltd manufactures high purity speciality fine chemicals of various grades for diversified end user industries. The Company has a global footprint of exports to over 20 countries. The company faces competition primarily from domestic and international companies, said Hensex Securities, with a 'subscribe' rating on the IPO.
The brokerage has cited dependence on select clients, operating in a manpower intensive industry. It may face manpower and niche demand as the key concerns for the company. "The company supplies products in limited quantities and for specific use by application industries thus any changes in the requirement of its products may affect the business," Hensex said.
For the nine months ended on December 31, 2023, Kronox Labs Sciences reported a net profit of Rs 15.46 crore with a revenue of Rs 68.44 crore. The company's bottomline came in at Rs 16.62 crore with a revenue of Rs 97.50 for the financial year 2022-23.
Pantomath Capital Advisors is the book running lead manager of the Kronox Lab Sciences IPO, while Kfin Technologies is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE with June 10 as the tentative date of listing of shares on the bourses.