NS initial public offer, or IPO, for Sigachi Industries has been opened for subscription starting Monday, November 1. The issue is scheduled to close on Wednesday, November 3, after a three-day bidding process. Manufacturer of cellulose-based excipients has fixed a price band for IPO 161-163 per equity share. However, the initial public offer of Sigachi Industries has been subscribed 2.84 times so far. On that note, let’s take a look at the details of the Sigachi Industries IPO.
Sigachi Industries IPO Details
The IPO consists of a fresh issue of 76.95 lakh shares. With this, the Hyderabad-based company plans to raise Rs 125 crore at the upper price band. For a retail investor, bids are invited for a minimum of one lot of 90 shares up to a maximum of 13 lots. This IPO is a completely fresh issue. This means there is no offer for sale or OFS in the IPO of Sigachi Industries. Unistone Capital is the sole book-running lead manager of the issue. On the other hand, the registrar of the issue is Share Services Private Limited. The IPO allotment will be done on November 10, while the refund will be initiated on November 11.
Sigachi Industries IPO Status
Investors on Monday placed their bids for 1.52 crore equity shares against the IPO size of 53.86 crore equity shares. Meanwhile, retail investors have subscribed 5.65 times the shares against the spares reserved for them. For non-institutional investors, the issue is subscribed 7 per cent, while Qualified Institutional Buyers (QIBs) have not placed their bids at the time of writing this article.
Objectives of Sigachi Industries IPO
Sigachi Industries, which has been operating since 1989, plans to use the money from the IPO to expand production capacity. The money will be used to expand production at their Dahej and Jhagadia units in Gujarat. The proceeds will also be used to fund capital expenditure for the construction of the CCS at a unit to be set up in Kurnool. The company also plans to use it for general corporate purposes.
Sigachi Industries IPO GMP
Shares of Sigachi Industries were receiving a gray market premium of Rs 150 on Monday, November 1. Shares of Sigachi Industries were trading at Rs 313 in the gray market, up nearly 92 per cent from the high end of the issue price on Monday. Higher GMP indicated stronger listing for the shares of Sigachi Industries on NSE and BSE later this month.
Institute Details
Sigachi Industries Limited, established in 1989, manufactures 59 different grades of Microcrystalline Cellulose (MCC) at its Hyderabad and Gujarat manufacturing units. The company is one of the leading MCC manufacturers in India with a total installed capacity of 11,880 million tonnes per annum. MCC grades range from 15 µm to 250 µm. MCC is used to make pharmaceutical and nutraceutical products.
Should You Subscribe to Sigachi Industries IPO?
Anand Rathi, a group of financial and investment experts, has given a ‘subscribe’ rating to the IPO of Sigachi Industries.
“At the upper end of the price band, Sigachi Industries Ltd., with a market capitalization of Rs 5,011 million, is offered at a P/E ratio of 15.1x of its TTM earnings. Considering that the company is one of the leading manufacturers of Microcrystalline Cellulose in India with more than 30 years of experience, pan India and international market presence, experienced management team and investments, which achieved a high RONW of 32.12 per cent in FY 2011 and Leads future growth with proper valuation. We give a ‘Subscribe’ rating to this IPO.”
Marwari Shares and Finance Limited gave a similar opinion. “Keeping in mind the adjusted EPS of FY 2011 of Rs 10.80 on a post issue basis, the company is going to be listed at a P/E of 15.10 with a market cap of Rs 5,011 million. There is no listed company in India whose business is comparable to that of the company. We assign ‘Subscribe’ rating to this IPO as the company is one of the leading manufacturers of MCC (cellulose-based excipients) in India with presence in diverse industry verticals and is available at reasonable valuations on a full-fledged basis.” investment group.
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