Clean Science and Technology saw massive interest from investors. The Rs 1,546 crore public issue was subscribed 93.41 times earlier this month.
Clean Science and Technology shares made a bumper listing on the stock exchanges today even as bears marred the overall market sentiment. Clean Science and Technology stocks began trading on the bourses at Rs 1,784 per share, up 98.27% or Rs 884.40 per share from the IPO price of Rs 900 apiece. A specialty chemical manufacturer, Clean Science has a global presence with a focus on developing green chemicals. The company manufactures specialty chemicals such as Performance Chemicals, Pharmaceutical Intermediates, and FMCG Chemicals. On listing, Clean Science and Technology had a market capitalization of Rs 18,953 crore.
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Clean Science and Technology saw massive interest from investors. The Rs 1,546 crore public issue was subscribed 93.41 times with all pockets of investors oversubscribing their quota. Qualified Institutional Buyers (QIB) bid for the IPO more than 156 times while high net-worth individuals (HNI) bid for the issue 206 times. Retail investors bid for 9 times the reserved portion. The public issue was entirely an offer for sale (OFS) by existing investors, including the promoters of the company.
“We like CSTL given its global leadership in green chemicals, diversified product portfolio, robust financials with industry-leading margins/return ratios and a strong focus on ESG front,” said analysts at Motilal Oswal. The brokerage firm had a ‘Subscribe’ rating on the issue. “The issue is reasonably valued at 48.2x FY21 P/E on post-issue basis(avg. peer FY21 P/E of 60x), while it enjoys higher RoE of 45% (avg. peer RoE of 18%),” they added. Clean Science and Technology has seen its net profit grow from Rs 97 crore in the financial year 2018-19 to Rs 198 crore in the previous fiscal year.
Incorporated in 2003, the company is among the fastest-growing and among the most profitable specialty chemical manufacturing companies globally, according to brokerage and research firm Geojit Financial Services. The company has a massive growth opportunity ahead as the overall market for specialty chemicals is valued at $800 billion in 2019 and is expected to record a growth rate of 5% to 6% over the next five years. Geojit Financial services had a ‘Subscribe’ rating on the issue, valuing the company at a P/E of 48x (FY21). “We assign a “Subscribe” rating for the issue on a long-term basis considering its technical expertise, process innovation, consistent focus on R&D, positive industry outlook, superior margin profile and healthy return ratios,” they added.