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The stock of Archean Chemical Industries Limited began its journey on the stock market with its debut at the bourses today, giving 12+% returns to its investors on the first day.
Archean Chemicals is a specialty chemicals producer. It is the largest producer and exporter of Bromine and Industrial Salt. It has a first-of-its-kind plant that produces Industrial Salt, Bromine, and Sulphate of Potash. It is also the sole producer of Sulphate Potash in India.
The company commenced operations in 2011 and began exporting to major countries like Japan and China in 2013. The company has 18 global customers in 13 countries and 24 domestic customers.
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Before floating its public issue, the company attracted several QIBs, including Goldman Sachs, Abu Dhabi Investment Authority, Segantii India Mauritius, BNP Paribas, Societe Generale, Government Pension Fund Global, ICICI Prudential, DSP Small Cap Fund, Tata Mutual Fund (MF), SBI MF, Nippon India MF, and Aditya Birla Sunlife Insurance, who invested Rs 658 crores in the anchor book of the company.
The IPO as a whole saw significant participation as the QIB portion, which was 75% of the entire offer, saw a subscription of 48.91x times! HNIs and RIIs were also enthusiastic towards the IPO as their portions were subscribed 14.9x times and 9.96x times respectively.
The shares of Archean Chemicals were allotted to investors on 16th November 2022, at a price of Rs 407 per share. The shares were expected to have a strong debut as they were trading at a GMP of Rs 124 before they were listed.
However, unlike the predictions of analysts, the share did not list at a 35-40% premium. The stock listed at 9:45 at Rs 450, a premium of almost 11%. The stock performed fairly at the exchange today as it closed at Rs 458.15 per share, up 12.57%.
The initial investment of Rs 14,652 (36 shares x Rs 407 per share) grew to Rs 16,493 (36 shares x Rs 458.15 per share) after today's trading session.
The specialty chemicals sector is an attractive segment and Archean Chemicals is expected to grow bigger in the long term. As such, analysts are suggesting their clients hold on to the shares on a short-to-mid-term basis.
Article by Aman Agarwal.
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