Aether Industries shares rally on listing, stock zooms 10% from IPO price on Dalal Street debut

The specialty chemical make came with its Rs 808 crore IPO last month. Of this Rs 627 crore was a fresh issue of equity shares while the remaining Rs 181 crore was an offer for sale (OFS).

Aether Industries IPO was a mix of fresh issue and OFS. (Image: REUTERS)

Aether Industries shares listed on the BSE and NSE (National Stock Exchange) today at a premium, amid the bullish sentiment on Dalal Street. Shares of the specialty chemicals manufacturer began trading on BSE at Rs 706.15 per share up 9.99% from the upper end of IPO price band of Rs 610-642 per share. On NSE the shares were trading at Rs 704 apiece Aether Industries IPO was fully subscribed by investors earlier last month with qualified institutional buyers (QIB) leading the bidding. On listing, Aether Industries had a market capitalization of Rs 8,790 crore.

The specialty chemical make came with its Rs 808 crore IPO last month. Of this Rs 627 crore was a fresh issue of equity shares while the remaining Rs 181 crore was an offer for sale (OFS) by existing shareholders of the company. Post issue, the promoter & promoter group shareholding will drop to 87.1% from 97%. Public shareholding in the company will increase to 12.9% from 3% earlier. 

Aether Industries IPO was subscribed a total of 6.26 times by investors. QIBs had bid for their portion 17.57 times while NII portion was bid for 2.52 times. The retail investor portion of the public issue was subscribed 1.14 times and employees of the firm subscribed their portion 1.06 times. Investors were offered shares in a bid lot of 23 equity shares of face value Rs 10 each. 

“Incorporated just 7 odd years back Aether Industries has become one of the fastest growing specialty chemical companies in India by growing its revenues at a CAGR of 49.5% between FY19 to FY21,” said analysts at Anand Rathi in their IPO note. “At the upper end of the IPO price band as of Aether Industries is valued at 72.3 times on annualized basis of FY22 earnings which looks fairly valued considering the growth opportunities for speciality chemicals in pharma, agrochemicals & FMCG space, and improving prospects for contractual manufacturing & CRAMS under Make-in-India initiatives,” they added. Anand Rathi had a ‘Subscribe for long-term’ rating on the issue. 

On the other hand, Marwadi Financial Services took a more cautious approach, advising investors to subscribe with caution. “Considering the TTM (Dec-21) EPS of Rs 8.50 on a post issue basis, the company is going to list at a P/E of 75.6x with a market cap of Rs 79,918 million whereas its peers namely Clean Science & Technology Ltd and Fine Organic Ltd. are trading at PE of 82.7x and 80.2x,” they said. They added that the company has low and declining Operating Cash Flow to EBITDA ratio which is a reason to be cautious.

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