Laxmi Organic IPO Review: Issue opens today, Anil Singhvi explains pros and cons, says apply for these reasons

Laxmi Organic IPO Review: Laxmi Organic initial pubic offering (IPO) opened today and Zee Business Managing Editor Anil Singhvi said investors can put money in this issue for both listing gains and with long-term objectives in mind.  

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He said you won't get bumper listing gains, but it's also there that this Laxmi Organic IPO won't disappoint you. "I think over 25 % listing gains is good. I feel 40 % to 50 % can be seen coming in Laxmi Organic IPO easily.  The reason is that its valuation is very attractive. The most important thing is that it is an old company and has seen its share of ups and downs in the market.  Another important trigger for Laxmi Organic IPO is the company's expansion plan in the fluorochemical segment for FY 22," SInghvi explained.

आज खुलेगा लक्ष्मी ऑर्गेनिक्स का IPO

IPO में आवेदन करें या नहीं?

कंपनी में क्या पॉजिटिव, क्या निगेटिव?

अनिल सिंघवी- अच्छे लिस्टिंग गेन और लंबी अवधि के लिए लगाएं पैसा#EditorsTake #LakshmiOrganic #IPO @AnilSinghvi_ pic.twitter.com/aWtmftvoIl

— Zee Business (@ZeeBusiness) March 15, 2021

Negative part about Laxmi Organic is that its capacity utilization does not cross more than 80 per cent. They have to bring in new products often as old products do not give desired revenue. Hence the company lacks in capacity utilization, he said.  

He said another thing is that Laxmi Organic revenue and margins have not increased much in the last three years. "The company's revenue and margin numbers are not impressive. But in order to compensate that it is giving shares at cheaper valuations than its listed peers," he said.

Laxmi Organic' IPO consists of fresh issuance of shares aggregating to Rs 300 crore and an offer for sale worth Rs 300 crore by the promoter Yellow Stone Trust.  

The price band has been fixed at Rs 129-130 per share for the IPO, which will open for public subscription during March 15-17.