Sigachi Industries shares made a bumper listing on the stock exchanges today. Shares of Sigachi Industries soared 253 per cent to Rs 575 apiece on BSE, against the issue price of Rs 163 per share. After a few minutes into trade, the shares rose to a new high of Rs 603.75 apiece, a rally of 270 per cent from IPO price. Analysts say that on the back of robust fundamentals and attractive valuations, Sigachi Industries made a stellar debut. The company is the leading manufacturer of MCC (cellulose-based excipient) in India with diversified industry verticals. The IPO was valued at 16x FY21 with no listed peers. The Rs 125.43-crore public issue had received an overwhelming response from investors and was subscribed 101.91 times. Before heading into the IPO, Sigachi Industries raised over Rs 37.62 crore from two anchor investors.
“Even though valuation-wise, Sigachi is attractively valued not only as compared to its peers but also as compared to recently listed companies, our advice will always be to book partial profits on listing gains,” AR Ramachandran, Co-founder & Trainer, Tips2Trades, told Financial Express Online. Ramachandran added that the overall market outlook remains weak due to very high inflationary pressures and having money at hand to buy at lower levels would be a better alternative in the current market situation.
The funds raised through IPO will be utilised to expand production at their Dahej and Jhagadia units in Gujarat. While Rs 2,815.82 lakh will be used in Dahej, Rs 2,924.13 lakh will be used in Jhajharia for the expansion. The company has also planned to use it for general corporate purposes. “One may book profits as the gains are more than 100%. Expect a further increase in price in the coming weeks if earnings are positive,” Manoj Dalmia, Founder and Director, Proficient Equities, said.
MCC is widely used as an excipient for finished dosages in the pharmaceutical industry and has varied applications in food, nutraceuticals, and the cosmetic industries. Currently, the company manufactures 59 different grades of microcrystalline cellulose at its manufacturing units, situated at Hyderabad and Gujarat with an aggregate installed capacity of 11,880 MTPY. “Existing shareholders are advised to hold the stock with a stop loss of Rs 480 while the new investors are advised to wait till the stock prices cool off,” Parth Nyati, Founder – Tradingo, said.
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