Aether Industries shares jump 10% to hit new highs; here's what pulling the stock higher

Shares of Aether Industries hit an upper circuit of 10 per cent during the early trading session on Wednesday and hit their new record highs amid fund-raising plans. The specialty chemical maker has been in the buzz at Dalal Street after inking a pact with Saudi Aramco Tech earlier this month.

On Monday, Aether Industries launched a qualified institutional placement (QIP) issue to raise up to Rs 750 crore. The fundraising committee of the company has fixed the floor price at Rs 984.90 per equity share, the company told the exchanges via regulatory filing.

Shares of Aether Industries surged 10 per cent, locked in the buyer's circuit, at Rs 1,103.75 with a total market capitalization close to Rs 14,000 crore. The stock had settled at Rs 1,003.45 in the previous session. Shares of Aether Industries have rallied more than 22 per cent in the current month so far.

The stock has been hogging limelight at Dalal Street after it signed a license agreement with Saudi Aramco Technologies Company for the commercialization of the sustainable Converge polyols technology. The company informed about the same through an exchange filing.

Incorporated in 2013, Surat-based Aether Industries was listed in June 2022, when the company raised a little more than Rs 808 crore from its initial stake sale by selling its shares for Rs 642 apiece. The stock has surged about 72 per cent from its issue price.

Aether Industries focuses on producing advanced intermediates and specialty chemicals involving complex and differentiated chemistry and technology core competencies, which are used in pharmaceutical, agrochemical, material science, coating, high-performance photography, additive, and oil and gas segments of the chemical industry.

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Its customers include more than 160 multinational, global, regional and local companies, including Divis Labs, Dr Reddy’s, UPL, Adama, Aramco Performance Materials, Polaroid, and Tosoh FineChem. Aether is currently in the process of expanding manufacturing capacities.

JM Financial had initiated its coverage on JM Financial earlier this month with a target price of Rs 1,080 per share, which has already been met. "Ethylene oxide price corrections in June 2023 bode well for Aether, which has a lot of products on ethylene oxide chemistry," JM said.
 

The best performances for the March quarter typically came from contract manufacturers, and this is where the medium-term investment opportunity seems most promising including Aether Industries, said Kotak Institutional Equities, which has kept the stock unrated so far.

"Improved results were driven by pharma demand recovery and the start of site-3 production with five new products, of which four are for pharma and one for agchem. The company is undertaking aggressive expansion plans with a capex worth Rs 750 crore over FY 2024-25 to drive revenues over Rs 2,500 bn by FY2027-28," it said.

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