Tatva Chintan Pharma Chem CFO resigns, co says in process to appoint his successor

Tatva Chintan Pharma Chem CFO resigns, co says in process to appoint his successor

Specialty chemical manufacturing company Tatva Chintan Pharma Chem said that Mahesh Tanna, Chief Financial Officer (CFO) of the company has tendered his resignation from the post of Chief Financial Officer and Key Managerial Personnel on 24" August, 2021.

“The company has accepted his resignation and he will be relieved from the Company with effect from 31 August, 2021 after closure of working hours,” Tatva Chintan informed in an exchange filing. Shares of Tatva Chintan were trading over 2% lower to ₹2,086 per share on the BSE in Wednesday’s opening deals.

The company is in the process of appointing his successor as Chief Financial Officer and Key Managerial Personnel (RMP) and the same will be informed upon such appointment, it added.

The specialty chemical manufacturing company Tatva Chintan shares made a bumper debut last month by surging nearly 100% at listing as against the issue price of ₹1,083. The ₹500-crore initial public offer of Tatva Chintan Pharma Chem received a strong investor response, with the issue getting subscribed by a whopping 180.36 times.

Proceeds from the fresh issue was said to be used towards funding capital expenditure requirements for expansion of the company’s Dahej manufacturing facility; up-gradation of a research and development facility in Vadodara, and general corporate purposes.

Incorporated in 1996, the Vadodra-based company is engaged in the manufacture of a diverse portfolio of structure directing agents (SDAs), phase transfer catalysts (PTCs), electrolyte salts for super capacitor batteries and pharmaceutical and agrochemical intermediates and other specialty chemicals (PASC). Tatva Chintan operates through two manufacturing facilities situated at Ankleshwar and Dahej in Gujarat. The company exports most of its products to over 25 countries, including the US, China, Germany, Japan, South Africa, and the UK.

Subscribe to Mint Newsletters * Enter a valid email * Thank you for subscribing to our newsletter.

Tatva Chintan not alone; here’s how recent IPOs have helped investors profit on listing day

IPOs are often considered to be quick wealth creators for the investors and the calendar year 2021 has so far proven to be a year where the stock markets have soared to record highs and the investor sentiment continues to be bullish when it comes to investing in initial public offerings.

Earlier today, Tatva Chintan Pharma Chem made a stellar debut listing at a premium of 95 per cent over its issue price, thereby nearly doubling the wealth of investors who were allotted the shares in the IPO.

In the past two months, investors of IPOs have witnessed their wealth soar on the day of listing. All the stocks which debuted in June-July have given a positive return on investment to the initial investors on the day of their first trade.

Apart from Tatva Chintan, G R Infraprojects, Clean Science and Technology and Zomato are the recent other IPOs that listed with over 50 per cent gains from their respective issue prices. G R Infra more than doubled the investors’ wealth on listing while Clean Science saw a 95 per cent jump on its debut on the NSE.

Here’s a look at all the recent listings and their listing returns:

Name of the IPO Issue Date Date of listing Listing price (Rs) Issue price (Rs) Percentage change Tatva Chintan Pharma Chem July 16-20, 2021 July 29, 2021 2,111.85 1,083 95.00 Zomato July 14-16,2021 July 23, 2021 116.00 76 52.63 G R Infraprojects July 7-9, 2021 July 19, 2021 1,715.85 837 105.00 Clean Science and Technology July 7-9, 2021 July 19, 2021 1,755.00 900 95.00 India Pesticides June 23-25, 2021 July 5, 2021 350.00 296 18.24 Krishna Institute of Medical Sciences June 16-18, 2021 June 28, 2021 1,009.00 825 22.30 Dodla Dairy June 16-18, 2021 June 28, 2021 550.00 428 28.50 Shyam Metalics and Energy June 14-16, 2021 June 24, 2021 380.00 306 24.18 Sona BLW Precision Forgings June 14-16, 2021 June 24, 2021 301.00 291 3.44 Source: National Stock Exchange (NSE)

IPOs have proven to be a sweet deal not only for investors but also for companies as well. More and more firms are looking to cash in on the positive market sentiment and are taking the IPO route to raise money.

As on date, companies have raised over Rs 42,000 crore through 28 IPOs in seven months of 2021 and if the number of companies that have filed their draft papers with the market regulator with Sebi or have shown intent to list is any indication, this could easily cross Rs 1 lakh crore by December should the secondary market maintain its tempo.

How does stock price behave after the end of the lock-in period for IPO anchor investors?

Who are the anchor investors?

Anchor investors are institutional investors, such as mutual funds or sovereign wealth funds, which buy substantial shares in the company just before its IPO opens for a subscription. Anchor book means the list of the institutional investors and it plays a critical role to boost investment sentiment for the IPO because anchor investors do deep research before investing in an IPO. If we see the trend then IPO backed by a strong anchor book tends to perform well in the long run.

What is it a month lock-in period?

Anchor investors can get an allotment of up to 30 percent of the IPO size and anchor investors are given allotment at the discretion of the company or the investment bankers instead on a proportionate basis. They are big investors and get additional benefits therefore they have a 30-day lock-in period which means they can’t sell their shares before 30 days from the date of allotment, which is typically two to three days before the listing.

To Know All IPO Related News, Click Here

How does stock price behave after the end of the lock-in period?

If we analyze the data then there is no clear trend about the performance of stocks in the long term after the end of the lock-in period but we generally see selling pressure near the end of the 30-day lock-in period or on the first day of trade after the 30-day lock-in period is over. Consider the case of SBI Cards and Payment Services which fell 15 percent on day after the 30-day lock-in for anchor investors. With this fall to Rs 505, SBI Cards shares declined by 30 percent from its issue price of Rs. 755 per share. One interesting observation is seen that the low made on the first day of trade after the 30-day lock-in period may act as strong support for a further rally for quality stocks. If fundamentals are strong it’s a good time to buy on such dips.

It cannot be said that all anchor investors are long-term investors but most anchor investors stay for a much longer horizon. Although an anchor investor has a longer horizon, a lot also depends on other factors like market conditions and valuation. If market conditions are positive, not just anchors but other investors also hold stock for the longer term. The growth outlook, financial performance, and valuations are other important factors, which investors keep an eye on. Also, if a stock price exceeds return expectations, anchor investors can exit their investments immediately after the 30-day lock-in period.

Looking at the recent IPOs where the 30-day lock-in period is going to end then Zomato raised Rs 4,197 crore from 186 anchor investors, Tatva Chintan Pharma and the Rolex Rings may outperform in the long run on the back of a strong growth outlook and their financial performance while Devyani International, Exxaro Tiles, Krsnaa Diagnostics and Windlass Biotech may underperform due to concerns about valuations and poor financials.

The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.