Tatva Chintan Pharma shares made a stellar debut on the stock exchanges on Thursday morning.
Tatva Chitan Pharma shares made a stellar debut on stock exchanges on Thursday, nearly doubling the IPO investors money on listing. Tatva Chintan Pharma’s share price soared to trade at Rs 2,111 per share, up 95% from the IPO price of Rs 1,083 per share. The stock had a market capitalization of Rs 4,680 crore on its stock market debut. Tatva IPO had received bids for 58.83 crore shares against 32.61 lakh shares on offer and saw a whopping 180.36 times subscription rate, making it the second-most subscribed public issue of the calendar year 2021.
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After the initial few minutes of trade, Tatva Chintan Pharma added to gains and soared as high as 115.58% from the IPO price to trade at Rs 2,318 per share.
Tatva Chintan Pharma is the largest and the only manufacturer of SDAs (40% of revenue) for Zeolites in India while it is the 2nd largest globally, said analysts at Motilal Oswal. The Indian specialty chemical market is expected to grow at 11.3% CAGR over CY19-24E (F&S report). Further India’s chemical export is expected to grow at 13% CAGR (CY19-24E) against China’s 7% due to the China+1 strategy. “Tatva Chintan Pharma is well placed to capture this opportunity with niche and diversified product portfolio across various industries,” Motilal Oswal said. The brokerage firm had a ‘Subscribe’ rating on the issue.
Ahead of the listing, Tatva Chintan Pharma was commanding a P/E valuation of 45.9x (to its restated FY21 EPS of Rs. 23.6), which is at discount to the peer average of 57.2x, according to Choice Broking. Subdued global economic environment, unfavourable government policies, difficulties in expanding product portfolio and customer base, unfavourable forex movements, and unfavourable movements in key raw material prices are some of the concerns that surround Tatva Chintan Pharma.