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Aether Industries IPO: The initial public offering (IPO) of specialty chemicals company Aether Industries, which opened for subscription on Tuesday, May 24, 2022, was subscribed by around 39 per cent by 11:57 am on the second day of bidding.
It received total bids for 36,88,464 shares across both the stock exchanges against 93,56,193 shares on offer, data from National Stock Exchange (NSE) showed.
The Rs 808.04 crore Aether Industries IPO will be available for subscription till Thursday, May 26, 2022, and the price band of the company has been fixed at Rs 610-642 per share.
The Aether IPO comprises a fresh issue of Rs 627 crore and an offer-for-sale (OFS) of 28,20,000 equity shares. Promoter Purnima Ashwin Desai will be selling the stake through the OFS.
Aether Industries is a specialty chemicals manufacturer in India focused on producing advanced intermediates and specialty chemicals involving complex and differentiated chemistry and technology core competencies. It started with a research and development (R&D) unit in 2013 and began commercial production in 2017. It caters to the pharmaceutical, agrochemical, material science, electronic chemical, high-performance photography and oil and gas industry segments.
The net proceeds from the fresh issue will be used for funding capital expenditure requirements for proposed greenfield project, prepayment or repayment of all or a portion of certain outstanding borrowings, funding working capital requirements and general corporate purposes, according to the information given in the red herring prospectus (RHP).
Half of the issue size has been reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and the remaining 35 per cent for retail investors.
Investors who wish to subscribe to Aether IPO can bid in a lot of 23 equity shares and multiples thereafter. At the upper price band, they will be shelling out Rs 14,766 to get a single lot of Aether Industries. The shares will be listed on both BSE as well as the NSE.
The applicants also must note that the cut-off time for UPI mandate confirmation is Friday, May 27, 2022, upto 12:00 pm. If they fail to do so then their application may not be considered.
HDFC Bank and Kotak Mahindra Capital Company are the book running lead managers to the offer while Link Intime India is the registrar of the issue.
Before heading into the IPO, Aether Industries on Monday raised over Rs 240.26 crore (Rs 2,40,26,81,790) from 25 anchor investors in lieu of 37,42,495 equity shares at Rs 642 each, data from the stock exchanges showed.
The anchor investors include SBI Mutual Fund (MF), Goldman Sachs, Nomura, Axis MF, Aditya Birla Sun Life MF, Kotak MF, IDFC MF and Tata MF among others.
The research teams at IIFL Securities, Reliance Securities, Anand Rathi Share and Stock Brokers and Swastika Investmart in their respective IPO notes have given a “Subscribe” rating to the offer for the long term.
IIFL Research in its IPO note said, “At the upper price band of Rs 642, Aether Industries Limited is demanding a PE multiple of ~87.2X based on its FY21 earnings while the company’s price to sales ratio is at 17.7X of FY21 revenue. The industry average PE multiple is 83.35X of FY21. Considering the differentiated portfolio of market-leading products, long standing relationships with a diversified customer base, plans of expanding its product portfolio and expanding distribution network in international market, we recommend subscribe to the issue with a long-term perspective.”
Reliance Securities in its report noted, “On FY22 annualized financials, the IPO is valued at 48.7x EV/EBITDA, 13.9x EV/Sales and 72x P/E. The company focuses on R&D to leverage the core competencies of chemistry and technology. It has an experienced and talented promoter group with strong educational background and work experience with global giants like Dow Chemical. Company caters to diversified customer base in India and abroad. Due to the strong and sustained financial record, differentiated portfolio of market-leading products, global outreach, strong technology oriented product portfolio and its focus on QEHS (Quality, Environment, Health and Safety), we recommend SUBSCRIBE to the issue.”
The share allotment is likely to take place on Tuesday, May 31, 2022, and the shares are expected to be listed on Friday, June 3, 2022, according to the timeline given in the RHP.
