Decent debut: Laxmi Organics Industries lists at 20.15% premium

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Laxmi Organics Industries made a decent listing on the stock exchanges today. Shares of specialty chemical manufacturer Laxmi Organic Industries opened at Rs 155.50 per share on the National Stock Exchange, implying a premium of 19.62% from the IPO price of Rs 130 per share. On the BSE, Laxmi Organics Industries opened at Rs 156.20, at a premium of 20.15%.

The Rs 600-crore initial public offer of the company got subscribed 106 times on the last day of the offer. The issue received bids for 3,46,29,37,270 shares as against 3,25,58,138 shares on offer, as per data available with the NSE. The category meant for qualified institutional buyers (QIBs) was subscribed over 120 times, non-institutional investors 120 times and retail individual investors (RIIs) by over 20 times.

The IPO comprised an OFS of Rs 300 crore from promoter group Yellowstone Trust and a fresh issue of Rs 300 crore by issuing 2,30,76,923 shares of Rs 2 face value. After the issue, the promoter shareholding will be reduced to 72.92% from 89.51% at present.

Proceeds from the fresh issue will be used for setting up a manufacturing facility for floor specialty chemicals, requirements of working capital, purchase of plant and machinery, and prepayment or repayment of all or a portion of outstanding debt.

Mumbai-based Laxmi Organic Industries is the leading manufacturer of acetyl & specialty intermediates and the largest manufacturers of ethyl acetate in India with a market share of approximately 30%. The company is the only manufacturer of diketene derivatives in India and has long-standing relationships with marquee customers like Alembic Pharmaceuticals, Dr Reddy’s Laboratories, Laurus Labs, Neuland Laboratories, Suven Pharmaceuticals, UPL amongst others.