Clean Science and Technology IPO

On July 7, the first day of bidding for the initial public offering (IPO) of speciality chemical company Clean Science and Technology, 87 percent of the shares had been subscribed.

According to subscription data accessible on markets, the offer got bids for 1.07 crore equity shares, compared to the IPO’s target size of 1.23 crore equity shares.

The subscription period for the Rs 1,546.6-crore public issue, which is a comprehensive offer for sale, will end on July 9. The offer price band has been set at Rs 880-900 per equity share.

Non-institutional investors’ reserved portion has been subscribed 73 percent, individual investors (1.43 times), and qualified institutional purchasers have made no bids thus far.

After completing fundraising from anchor investors on July 6, the offer size was decreased to 1.23 crore equity shares from 1.718 crore equity shares. Clean Science raised Rs 463.98 crore through the sale of 51,55,404 equity shares at a price of Rs 900 each.

The issue’s primary purpose is to boost the promoter group’s visibility through listing and to generate liquidity.

“The IPO is valued at 48.2 times FY21 earnings per share, which we believe is appropriate in comparison to the valuations of several speciality chemical businesses in the public universe,” according to Aditya Birla Capital, which granted the issue a subscribe rating.

The specialty chemicals industry in India is growing due to a number of favourable factors such as several multinational corporations’ ‘China + 1’ sourcing strategies; reduced production in China due to strict environmental and pollution regulations affecting the chemical industry; growing manufacturing base of several end-user industries in India; and favourable government policies such as the production lin.

Clean Science & Technology is a maker of functionally essential speciality chemicals, including performance chemicals, pharmaceutical intermediates, and consumer packaged goods (CPG) chemicals. It operates two factories in Kurkumbh (Pune, Maharashtra), with a combined capacity of 29,900 MTPA and 11 production lines.

Clean Science is the market leader in numerous of its products because to its proprietary procedures and catalysts. “It has embraced sustainable chemistry by eliminating waste and pollution from its manufacturing plants. It benefits from favourable return ratios and margins as a result of the establishment of significant entry barriers “Aditya Birla Capital stated.

In terms of manufacturing capacity, it is the world’s largest manufacturer of MEHQ, BHA, Anisole, and 4-MAP, with dedicated production lines for essential goods.

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Krishna Rath is a SEBI Registered Investment Adviser, and since 2015 has been educating netizens on investments and insurance. Krishna is a fee only SEBI RIA and is Odisha's first SEBI RIA. With background in IT, Krishna is changing the advisory space with new innovations in AdvisoryTech.

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