Chemplast Sanmar lists at discount on BSE; here’s what you should do now

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Shares of Specialty chemicals maker Chemplast Sanmar on Tuesday made a tepid debut on bourses, with its shares getting listed at a discount of up to 3% compared to its issue price. On BSE, the scrip opened 2.95% down at Rs 525 compared to the issue price of Rs 541. However, on NSE, the shares were listed on a positive note at Rs 550, 1.66% above the issue price.

Earlier this month, the company’s initial public offer (IPO) received bids for 8,66,38,140 shares against 3,99,52,829 shares on offer. The public offer aggregating up to Rs 3,850 crore had a fresh issue of up to Rs 1,300 crore and an offer for sale of up to Rs 2,550 crore.

Saurabh Joshi, research analyst, Marwadi Shares and Finance said, “We have given a subscribe (with caution) rating to Chemplast Sanmar IPO and listing was broadly in line with our expectations. The stock listed at a 2% premium over its issue price in NSE and we have recommended investors to exit at listing itself.”

Chemplast Sanmar is a specialty chemicals manufacturer in India with a focus on specialty paste PVC resin and custom manufacturing of starting materials and intermediates for pharmaceutical, agro-chemical and fine chemicals sectors.

“Although the company is well-positioned to capture favourable industry dynamics, but the negative net asset value along with higher trade payable days keeps us cautious from a longer-term perspective,” Joshi said.

Santosh Meena, head of research, Swastika Investmart said, “It was another day of weak listing as Aptus value housing and Chemplast Sanmar debuted the secondary market on a weak note because sentiments have become fragile in August month. I think such kind of period is healthy for the market because it has taken out froth from the primary market and the market has become light and rational for the news issues.”

“If we talk about today’s listings then Aptus has strong financials with the comfort of valuations therefore long-term investors who have little aggressive view can add this stock into their portfolio while there are some concerns about the quality of Chemplast. Valuations are also stretched in the chemical sector therefore investors should stick with quality stocks in this space that have growth visibility,” he added.