Chemplast Sanmar shares list at loss, debut at discount to IPO price; open at Rs 525

Chemplast Sanmar shares list at loss, debut at discount to IPO price; open at Rs 525

Upon successful listing, Chemplast Sanmar has joined the likes of PI Industries, SRF Ltd, Finolex Industries and Navin Fluorine International

Chemplast Sanmar shares made a weak debut on stock exchanges on Tuesday, 24 August 2021, even as BSE Sensex and Nifty 50 were firm. Chemplast Sanmar shares began trading at Rs 525 apiece on BSE today, down nearly 3 per cent from the upper end of the IPO price band of Rs 541 per share. Following this Chemplast Sanmar becomes the third recent listing to trade at discount on listing day, after CarTrade Tech and Nuvoco Vistas. While, it got listed at a premium on NSE, at Rs 550 apiece, up 1.66 per cent over the issue price. Chemplast Sanmar IPO was open during August 10-12. Chemplast Sanmar shares have relisted on the stock market after being delisted from the exchanges nearly a decade ago in 2012. The Rs 3,850-crore IPO was subscribed 2.17 times. At listing, Chemplast Sanmar had a market capitalisation of Rs 8,300.75 crore.

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Upon successful listing, Chemplast Sanmar has joined the likes of PI Industries, SRF, Finolex Industries and Navin Fluorine International. Chemplast Sanmar is a specialty chemicals manufacturer in India with focus on specialty paste PVC resin and custom manufacturing of starting materials and intermediates for pharmaceutical, agro-chemical and fine chemicals sectors.

The total production of specialty paste PVC resin in India in the financial year 2020 stood at 78 KTPA against a demand of 143 KTPA. In India, Grasim Industries Ltd. (including Aditya Birla Chemicals), DCM Shriram Limited (DCM Shriram), Gujarat Alkalies and Chemicals Ltd.(GACL), and Reliance Industries Limited (RIL) have a combined capacity of more than 2800 KTPA. Chemplast Sanmar was delisted from BSE, NSE and MSE with effect from June 25, 2012, June 18, 2012, and June 25, 2012, respectively. Post-IPO, the promoter group shareholding in Chemplast Sanmar has dropped to 55 per cent from the 100 per cent while the public shareholding increased to 45 per cent.

Analysts say that having a strong market position in specialty chemicals, the company is well-positioned to capture favourable industry dynamics. Also, industry in which the company enjoys leadership position has high barriers to entry.

Chemplast Sanmar shares: Should you buy or hold after tepid debut?

Chemplast Sanmar shares made a tepid debut at Indian bourses today as the stock opened at ₹525 — near 3 per cent lower from its upper price band of ₹541. In the intraday trade session (till 12:03 PM), Chemplast share price has made its day high of ₹550 while it has made its day low of ₹510 at NSE. According to experts, the stock has weak fundamentals and due to the volatility in the markets, it may come down below ₹500 levels. They said that one should come out of its current position and buy only when it comes around ₹470 to ₹475 per stock levels for the 9 months target of ₹620.

Speaking on the Chemplast Sanmar share price target; Jyoti Roy, DVP- Equity Strategist at Angel Broking said, “If the share falls below the issue price, one should avoid fresh buy in the counter. On account of concerns due to high debt on books and negative net worth, we had given neutral call on the public issue.”

However, Ravi Singhal, Vice Chairman at GCL Securities said that if the stock comes below ₹500, then one can buy the specialty chemical stock at around ₹470 to ₹475 levels maintaining stop loss at ₹444. He said that the stock may rebound and go up to ₹620 in next 9 months.

On his suggestion to those who have this stock in their portfolio, Ravi Singhal of GCL Securities said that the issue has opened below its issue price and the market is expected to remain volatile for next few trade sessions as well. So, one should exit the counter as it is trading around its upper price band of ₹541. He advised Chemplast share holders to exit at CMP and make fresh buy only when it comes around ₹470 to ₹475 per stock levels.

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Chemplast Sanmar shares list on a mixed note in stock market

Chemplast Sanmar share price: The shares of specialty chemicals maker Chemplast Sanmar made a return to the stock exchanges on a mixed note today.

The scrip got listed at Rs 525.00 apiece on the BSE, thereby registering a fall of 2.96 per cent from its offer price of Rs 541.00. On the National Stock Exchange (NSE) however, it opened at Rs 550.00, registering a gain of 1.66 per cent from the issue price.

The stock slipped further from its opening rates and touched an intraday low of Rs 510.00 on NSE and Rs 510.30 on the BSE so far during the first half-hour of trade.

Chemplast Sanmar shares were earlier delisted from BSE, NSE and MSE with effect from June 25, 2012, June 18, 2012, and June 25, 2012, respectively.

At 10:30 am, the scrip was trading at Rs 526.95 on the BSE, down 2.60 per cent from the issue price while on NSE it was at Rs 529.85.

Over 77.76 lakh shares of Chemplast Sanmar were traded on the NSE during the first 30 minutes of trade, while over 3.05 lakh shares exchanged hands on the BSE, data from the respective stock exchanges showed.

The Rs 3,850 crore IPO of the specialty chemicals manufacturer was subscribed 2.17 times during its offer period from August 10-12.