Rossari Biotech share closes 77% higher to IPO issue price, what experts say

Share price of Rossari Biotech ended 74% higher than its IPO issue price on its market debut today. Rossari Biotech share gained Rs 317 to close at Rs 742.35 against the issue price of Rs 425 on BSE.  On the other hand, the stock closed 10.80% or rs 72 higher than its listing price of Rs 670 on BSE.  Total 30.27 lakh shares changed hands  amounting to turnover of Rs 218.99 crore. Market cap of the firm rose to  Rs 3,854 crore.

On its debut on BSE, the share hit an intra day high of Rs 804, a gain of 20% to the listing price and 89 % to its issue price of Rs 425. During the day, it fell 1.04% to Rs 663.55 against its listing price of Rs 670.

On NSE, the share gained up to 89% intra day to Rs 803 over issue price of Rs 425. It closed 77% higher at Rs 752 over the IPO issue price.

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Earlier, share of Rossari Biotech opened at Rs 669.25 climbing 57.46% above issue price of Rs 425 on BSE today. On NSE, Rossari Biotech made its debut at Rs 669.25 climbing 57.46% above its issue price.

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The IPO was launched after a gap of 4 months on July 13 due to weak market sentiment arising out of coronavirus crisis. On March 2, SBI Cards and Payment Services floated its IPO which saw weak response amid a volatile market.

Analysts are positive on the outlook of the firm.

Analysts at Geojit said, "Current capacity of the firm stands at 1,20,000 MTPA with 82% utilisation while new facility setting up  Dahej  at Gujarat  with  a  proposed  installed  capacity  of  132,500  MTPA and  is expected to start operations in FY21, which will support revenue growth. Post  IPO,  cash  flow  of  the  company  expects  to  improve  with reduced debt  and capex getting completed by FY21.  The firm  has logged return on equity at  44%  (last  3-year  average),  strong  revenue  growth."

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Keshav Lahoti, Associate Equity Analyst at Angel Broking said,"We believe Rossari will command a premium over most of its chemical peers as it is net debt free as well as it has better asset turnover, working capital days, ROE and ROCE better than most of its peers. In the last three years, Rossari has reported 32% and 66% revenue and PAT CAGR due to the strong promoter and management team."

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