Archean Chemical Industries IPO Review by Anil Singhvi: Subscribe or Avoid? Check recommendation here

Archean Chemical Industries IPO Review: Archean Chemical Industries' initial public offering (IPO) is open for subscription. Today is the second day for investors to subscribe to the IPO of the company which has a specialty in marine chemical manufacturing. The company's IPO got subscribed 30 per cent on the first day of subscription on Wednesday. According to NSE data, it received bids for 59,41,260 shares against 1,99,57,325 on offer.

The IPO consists of a fresh issue of equity shares aggregating up to Rs 805 crore and an Offer For Sale (OFS) of up to 1.61 crore shares by the promoter and investors. The price band has been fixed at Rs 386-407 per share.

According to Zee Business Managing Editor Anil Singhvi, only those investors who are willing to take high-risk should subscribe. However, Singhvi said the company is into manufacturing special chemicals that are high in demand and also have good margins. 

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"So the business prospect is very good and the financial track record of the last three years is very impressive. So this company is very strong from all perspectives. Also, the valuation of the company is reasonable. On the negative side, the company has issued debentures and is already giving interest of 17 per cent. I fail to understand why the company is doing this when it has better options from the banks," he added.

Singhvi said that the company is too dependent on China as 40 per cent of the revenue is coming from there. "Therefore only investors who can take high-risk should subscribe for the IPO and that too for listing gains. Even if there's loss, one should exit after listing," Singhvi added.

#IPOAlert

Archean केमिकल इंडस्ट्रीज IPO का आज दूसरा दिन, प्राइस बैंड ₹386-407/शेयर

Archean केमिकल इंडस्ट्रीज में क्या है खास?

शॉर्ट टर्म और लॉन्ग टर्म के लिहाज से क्या करें?

जानिए अनिल सिंघवी की राय...#ArcheanChemicalIndustriesIPO #investor @AnilSinghvi_ pic.twitter.com/NPhgBo87SI

— Zee Business (@ZeeBusiness) November 10, 2022

Meanwhile, the portion for Retail Individual Investors (RIIs) got subscribed 95 per cent. The category for non-institutional investors received 36 per cent subscription while Qualified Institutional Buyers (QIBs) portion was subscribed 4 per cent.

On Monday, the company raised Rs 658 crore from anchor investors.
The firm plans to use the proceeds of the fresh issue for the redemption of Non-Convertible Debentures (NCDs) issued by it.

Archean is focused on producing and exporting bromine, industrial salt, and sulphate of potash. IIFL Securities, ICICI Securities and JM Financial are the book-running lead managers to the IPO.

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