IPO: Aether Inds closes up 21% on its IPO price on the day of listing

Mumbai: Shares of specialty chemicals maker Aether Industries ended up rising 21% from its IPO price on Friday’s trading day at ₹776.75.

The company had debuted in the market earlier today at ₹706.15, a 10% premium to its IPO price of ₹642.

The stock’s closing level is also its upper circuit limit for the day.

Analysts said the recent market rebound and strong growth prospects for the company have prompted investors to take a positive view of the stock in a market where recent listings have either been subdued or discounted.

Aether Industries raised ₹808 crore through its initial offering last month. The issuance took place between May 24-26 and the company sold its shares in a price range of ₹610-642 per share. The IPO was subscribed 6.26 times due to strong response from institutional buyers whose share was subscribed 17.6 times. The HNI and retail shares were subscribed 2.52 and 1.14 times respectively, while the employee share was subscribed 1.06 times.

Ahead of the IPO, Anand Rathi Brokerage had recommended subscribing to the IPO from a long-term perspective. The brokerage said the 72.3x valuation on an annualized basis of FY22 earnings looks pretty valued.

“Aether is known to have a strong positioning in the complex intermediates market where global competition is intense,” Rathi said.

“Aether is expected to continue to maintain its leadership position in a few of its products due to continued focus on research and development, improved capacity after expansion plans, synergistic business models , differentiated product portfolios of market-leading products and longstanding customer relationships,” said Rathi.

For its part, Choice Broking had recommended to “subscribe with caution” to the IPO.

“Given its dominance in certain specialty chemicals and growth prospects in end-use applications, we believe the company has a buoyant outlook. However, a stretched valuation is a concern,” Choice Broking said.

Richard L. Militello