Shares of Sigachi Industries jumped over three times its issue price on the listing day, making it the best-ever stock market debut for any scrip. The stock began trading at Rs575 on the BSE, a premium of 252.76% against its issue price of Rs163 per share. On the NSE, the scrip began trading at Rs 570. It then made an intra-day high of Rs 603.75, up around 270% against its issue price.
Surging 270%, the company marked the highest-ever one-day listing gains in a decade in the Indian equity markets. Earlier, IPOs of Paras Defence, Astron Paper, and Burger King gained 180%, 139%, and 130%, respectively, on their listing days.
The public offer of the company opened for subscription from November 1 to 3. The chemical company successfully raised Rs125.43 crore at an upper price band of Rs163. The offer had received a hefty response from investors as the issue was subscribed 101.91 times during the subscription period. The portion set aside for qualified institutional buyers (QIBs) and non-institutional investors (NIIs) were subscribed 86 and 172 times, respectively. The retail portion was subscribed 80.49 times.
According to the company, funds from the share sale will be used to fund capital expenditure for the expansion of production capacity for Microcrystalline Cellulose (MCC) at Dahej and Jhagadia, Gujarat. Furthermore, it will also use the funds to manufacture Croscarmellose Sodium (CCS), a modified cellulose used as excipient at Kurnool in Andhra Pradesh. The company will use the remaining portion for general corporate purposes.
Sigachi Industries is engaged in the manufacturing of MCC, which is widely used as an excipient for finished dosages in the pharmaceutical industry. MCC has varied applications in the pharmaceutical, food, nutraceuticals, and cosmetic industries.
All leading brokerage houses had assigned a “subscribe” rating to the company’s IPO on the back of the firm’s strong presence in Indian and international markets and potential of future growth.
“The company is one of the leading manufacturers of Microcrystalline Cellulose in India with over 30 years of experience, pan India and international market presence, experienced management team and investment-led future growth with high RoNW of 32.12% in FY21 and reasonable valuation,” said Anand Rathi Shares & Stock Brokers in a note.