Aether Industries IPO Day 3: Aether Industries IPO subscription ends today. This means investors looking to buy the public offer, it’s their last chance today. The company is selling its shares in the range of Rs 610-642 apiece to raise Rs 808 crore through the primary route. Aether has reserved 50 per cent of the net offer for qualified institutional buyers (QIBs), whereas non-institutional buyers (NIIs) will get a 15 per cent allocation. The remaining 35 per cent shares will be given to the retail bidders. Incorporated in 2013, Aether Industries is a manufacturer of specialty chemicals and sole play in some of the categories. The company is the largest manufacturer of 4MEP, T2E, NODG, and HEEP products in the world by volume.
Aether Industries IPO: Subscription Status
After day two of bidding, the public issue worth Rs 808.04 crore has been subscribed 0.49 times whereas its retail portion has been subscribed 0.67 times. According to BSE data, investors made bids for 45,68,996 equity shares or 49 per cent, compared to the 93,56,193 equity shares offered for the subscription by the close of bidding on the second day. The quota for retail bidders was subscribed 67 per cent, whereas the allocation employees fetched 93 per cent bids. The allocation for HNI’s was subscribed merely 16 per cent, whereas the QIB portion fetched 39 per cent bids.
Aether Industries IPO: GMP Today
According to market observers, shares of Aether Industries are available at a premium of Rs 3 in the grey market today, which is Rs 7 down from yesterday’s evening grey market premium of Rs 10. They said that negative sentiments in the secondary market have taken its toll on grey market sentiments in regard to the Aether IPO. However, market experts suggest to investors that GMP is unofficial data, which is non-regulated. So, those who follow GMP are advised to go through the financials of the company as well because the balance sheet of the company will give a better picture of the company’s fundamentals.
Aether Industries IPO: Objective
The net proceeds from the fresh issue will be used for funding capital expenditure requirements for proposed greenfield project, prepayment or repayment of all or a portion of certain outstanding borrowings, funding working capital requirements and general corporate purposes, according to the information given in the red herring prospectus (RHP).
Aether Industries IPO: Financials
IIFL Research in its IPO note said, “At the upper price band of Rs 642, Aether Industries Limited is demanding a PE multiple of ~87.2X based on its FY21 earnings while the company’s price to sales ratio is at 17.7X of FY21 revenue. The industry average PE multiple is 83.35X of FY21. Considering the differentiated portfolio of market-leading products, long standing relationships with a diversified customer base, plans of expanding its product portfolio and expanding distribution network in international market, we recommend subscribe to the issue with a long-term perspective.”
Aether Industries IPO: Should you Buy?
Majority of brokerages are positive on the issue and have recommended subscribing to it following its strong financial, niche products and growth prospects over the year. The company, with its differentiated portfolio of market-leading products, has focused on R&D to leverage its core competencies of chemistry and technology, said Hem Securities, with a subscribe rating on the issue.
“The company has long-standing relationships with a diversified customer base and with synergistic business models focused on large Scale Manufacturing, CRAMS and Contract Manufacturing,” it added. “On the financial front, the company has shown strong and consistent financial performance.”
Reliance Securities in its report noted, “On FY22 annualized financials, the IPO is valued at 48.7x EV/EBITDA, 13.9x EV/Sales and 72x P/E. The company focuses on R&D to leverage the core competencies of chemistry and technology. It has an experienced and talented promoter group with strong educational background and work experience with global giants like Dow Chemical. Company caters to diversified customer base in India and abroad. Due to the strong and sustained financial record, differentiated portfolio of market-leading products, global outreach, strong technology oriented product portfolio and its focus on QEHS (Quality, Environment, Health and Safety), we recommend SUBSCRIBE to the issue.”
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