Chemcon Speciality Chemicals rewards shareholders handsomely on listing day, doubles their money in just a week

Chemcon Speciality Chemicals opened for trading at Rs 730 apiece at a staggering 115 pct premium to its issue price of Rs 340! Chemcon share price made an intraday high of Rs 743 before it witnessed some sharp profit booking as it was trading at extremely high valuations.

At a current market price of Rs 600, the Chemcon Speciality Chemicals is available at a market cap of just over Rs 2200 Cr.

As indicated by Zee Business Managing Editor Anil Singhvi that listing for this speciality chemical company will be strong and can double investors’ money on listing day itself and that it would be advisable for investors to book profits and take advantage of the listing gains.

Furthermore, he added there is not much comfort in holding the company considering various data points pertaining to the company.

The speciality chemical company’s Rs 318 Cr IPO got overwhelming response from the investors and was subscribed 149 times on the final day of bidding on September 23. Non-institutional investors' category made most of the purchases as this category was subscribed over 450 times, followed by institutional investors who subscribed over 113 times. Retail portion for this IPO was subscribed 40 times. Listing premium clearly justifies the demand witnessed during the IPO issue.               

Chemcon had raised 95 Cr from anchor investors ahead of the IPO issue. Company offered 93.5 lakh shares at the offer price of Rs 338-340 apiece in the IPO issue. Chemcon speciality chemical wants to use the IPO proceeds for working capital requirements, capital expenditure on manufacturing units and other corporate purposes.

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The Company gets 65% of the revenue from the pharmaceutical industry. This company is the specialty chemical manufacturer of pharma chemicals and Oilwell completion chemicals. The company is the sole producer of HMDC (hexamethyldislazane) and CMIC (chloromethyl isopropyl carbonate) in India. These chemicals not only have huge demand in India but also have good opportunities to do well in the export market, which can drastically improve the margins of the company ,drive revenue growth forward and improve profitability from a long term point of view.

(By Rahul Kamdar)