Aether Industries shares hit 10% upper circuit, gains 21% on issue price on debut day; what should investors do?

Shares of Aether Industries were locked in 10 per cent upper circuit after specialty chemical firm made a strong debut on the exchanges, BSE and NSE, on Friday.  

Against the upper band of the IPO price of Rs 642 per share, the counter was listed at 10% premium to Rs 706 per share on the BSE. On the NSE, Aether Industries stock debuted with a gain of Rs 62 or 9.66% to Rs 704 per share. The company had fixed a price band of Rs 610-642 for its Rs 808-crore IPO.  

At 11.45 am, shares of Surat-based specialty chemical firm were locked in 10% upper circuit to Rs 776.75 per share on the BSE. It is a gain of 10% or Rs 70.60 on the listing price and 21% or Rs 134.75 on the IPO issue price.  

Experts have largely dubbed it as a long-term bet and recommended holding the stock.  

Shri Kamalvijay Tulsian, Chairperson, Aether Industries Limited and Shri Ashwin Desai, MD, Aether Industries Limited along with Shri @ashishchauhan, MD&CEO, @BSEIndia and Others ringing the opening bell to mark the Listing of Aether Industries Limited on 3rd June, 2022 at #BSE pic.twitter.com/qQXl4nY92Y

— BSE India (@BSEIndia) June 3, 2022

Zee Business Managing Editor Anil Singhvi said long-term investors can hold with stoploss of Rs 640.  

Singhvi said Aether Industries is a market leader with a strong growth outlook. It has impressive financials and is expected to go debt-free post listing, he said.  

However, the company has a small business history and the promoter also plans to sell 12% more stake in future, observed the market guru.    

"In terms of valuations, it is neither expensive nor attractive. It comes at just reasonable valuations. Investors seeking to subscribe to this issue should do with long-term perspective," he added. 

Santosh Meena, Head of Research, Swastika Investmart Ltd, dubbed good listing to a recovery in market sentiments, outstanding growth prospects of the company, and a good response from the investors.  

The company is one of the fastest-growing specialty chemical companies in India, having a high focus on d R&D, relying on differentiated chemistry & technological core competencies, and a robust product selection process, he said.  

"The Indian chemical industry is witnessing a structural change due to the shift of manufacturing activities from China to India and the focus on green chemistry," Meena underlined.  

He said investors, who applied for listing gains, can maintain a stop loss of Rs. 675. New investors can buy for the long term and existing investors are recommended to stay invested in the company," suggested the expert.  

Aayush Agrawal, Senior Analyst, Swastika Investmart Ltd also said long-term investors may accumulate the stock. Expecting positive listing, Agrawal had said the issue was priced at a P/E of 72.30 based on annualized FY22 numbers. "We believe that the company deserves this premium multiple due to its phenomenal growth prospects," he had said. 

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.