Sigachi Industries stocks list at 250 % premium to Rs 575 on BSE; hold or book profit - What should you do?

Sigachi Industries stocks made a bumper listing on the Bombay Stock Exchange on Monday. The shares of cellulose-based excipient manufacturer opened at 252.76% premium. Sigachi Industries IPO started at Rs 575 per share on the BSE. The company has fixed an issue price of Rs 163 per share.  

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Parth Nyati, Founder,Tradingo 

Sigachi Industries saw a bumper listing with a gain of approximately 250% on the back of robust fundamentals and attractive valuations. The company is the leading manufacturers of MCC (cellulose-based excipient) in India with diversified industry verticals. IPO was valued at 16x FY21 with no listed peer. Over the long run, if the demand is sustained for MCC and the expansion program of the company post the IPO, it will provide earnings growth momentum. "Existing shareholders are advised to hold the stock with an SL of Rs 480 while the new investors are advised to wait till the stock prices cool off."

Manoj Dalmia, Founder and Director, Proficient Equities on post listing:

Sigachi Industries-Made an opening with Rs 598 on the listing. One may book profits as the gains are more than 100%. Expect a further increase in price in the coming weeks if earnings are positive.

Rahul Sharma, Co-Founder, Equity99

Sigachi Industries manufacturer of Microcrystalline Cellulose (MCC) was listed today at premium of 250%, highest in recent times. Long-term investors are advised to remain invested, considering niche product offering of the company. However, considering listing premium, short term investors are advised to book their profits as their capital is almost 3x in 10 to 15 days. For fresh Entry, Advice would be to wait for declines & not to enter fresh at the listing gains of 267%

Ravi Singhal, Vice Chairman at GCL Securities

“Sigachi Industries shares have made a dream debut at Dalal Street today by delivering around 270 per cent listing gain. Lucky bidders should book 50 per cent profit and recover their principal and keep the rest 50 per cent stocks in their portfolio. They should hold Sigachi Industries shares for the one month target of ₹888, maintaining stop loss at ₹530 per share levels."On what about those who failed to get Sigachi Industries shares during allotment, Ravi Singhal of GCL Securities said, "Those who failed to get Sigachi shares during allotment are advised to buy the counter at current levels for one month target of ₹888 maintaining strict stop loss at ₹530."

Earlier, Sigachi Industries, manufacturer of cellulose-based excipient, initial public offer (IPO) opened on November 1 and closed on November 3, 2021. The Rs 125.43-crore IPO had received a staggering response from investors, who subscribed the issue over 100 times. The initial public offer of Sigachi Industries had received a whopping 101.91 times subscription on the last day of the offer. The IPO received bids for 54,89,47,440 shares against 53,86,500 shares on offer, as per NSE consolidated data. 

Earlier, the company had fixed a price band of Rs 161-163 per share for Sigachi Industries. It had issued 76.95 lakh equity shares through IPO. 

The company plans to use the revenue raised through the public issue for the expansion of the production capacity facility for Microcrystalline cellulose at Dahej and Jhagadia. It will also use the proceeds to manufacture Croscarmellose Sodium at Kurnool for general corporate purposes. However, the company will not receive any proceeds from the Offer for Sale (OFS). 

Before the issue the promoters and promoter group held 64.6 per cent stake in the company, which will reduce to 48.5 per cent post the issue. The public shareholding will increase to 51.5 per cent post the issue from the existing 35.4 per cent. 

Book running lead managers to the issue is Unistone Capital, while Bigshare Services Private Ltd. is the registrar of the public issue. 

Sigachi Industries Ltd was incorporated as a private limited company in 1989. It manufactures 59 different grades of Microcrystalline Cellulose (MCC) at its manufacturing units, situated at Hyderabad and Gujarat with an aggregate installed capacity of 11,880 MTPY. 

(Disclaimer: The views/suggestions/advices expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)