Retail portion of Tatva Chintan Pharma Chem’s IPO subscribed 1.65 times

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One the sidelines of Zomato IPO Gujarat-based Tatva Chintan Pharma Chem has launched its Rs 500 crore IPO. While the specialty chemical issue is not buzzing as the Zomato’s issue, but the interesting fact is that 83% of the issue is subscribed in just two and half hours of opening.

According to NSE’s website as of 11:31 am the issue received bids for 27,13,503 shares versus 32,61,882 on the block. The portion reserved for retail investors saw maximum bid and was subscribed 1.65x as retail investors placed bids for 26,85,241 shares compared to 16,30,941 shares on the block. The portion for Non-Institutional Investors was subscribed to just 4% and the quota for qualified institutional buyers (QIBs) is yet to receive bids.

Ahead of the IPO the specialty chemical company on July 15 has garnered Rs 149.99 crore from 22 anchor investors that include the likes of Goldman Sachs, HSBC Global, Abu Dhabi Investment Authority, Aberdeen Standard Asia, and Nomura. Domestic institutional investors like Axis MF, Aditya Birla Sun Life, Nippon Life, SBI Life Insurance, SBI MF, ICICI Prudential, and HDFC Trustee were also allotted shares.

Market participants are of the opinion that IPO frenzy retail investors are trying to cash on as many opportunities as they can. Also, the issue is reasonably priced compared to its peers and can give good listing gains.

In the grey markets, the share was quoting at Rs 1,783 to Rs 1803 commanding a premium of Rs 710-720 or 66% over its issue price. “At the upper band asking PE comes to 41.62x and P/BV comes at 13x. Comparing with other listed peers the issue seems fairly priced. Momentum in chemical stock and small issue size should help in attracting good subscription,” said Abhay Doshi, Founder of Unlisted Arena who tracks grey markets.