Sigachi Industries IPO: The initial public offering (IPO) of Sigachi Industries, manufacturer of cellulose-based excipient, opened for subscription earlier today. So far, the issue was subscribed 9.52 times by the end of the first day of bidding on Monday.
It received total bids for 5,12,75,610 shares across both the stock exchanges against 53,86,500 shares on offer, data from National Stock Exchange (NSE) showed.
The Rs 125.43 crore Sigachi Industries IPO will be available for subscription till Wednesday, November 3, 2021, and the price band of the Microcrystalline Cellulose (MCC) manufacturer has been fixed at Rs 161-163 per share.
MCC is widely used as an excipient for finished dosages in the pharmaceutical industry and has varied applications in food, nutraceuticals, and the cosmetic industries.
The IPO of the Hyderabad-based firm is entirely a fresh issue of 76,95,000 equity shares aggregating up to Rs 125.43 crore at the upper price band.
The proceeds from the IPO will be utilised towards the expansion of production capacity for MCC at Dahej (Gujarat) amounting to Rs 28.16 crore, for the expansion of production capacity for MCC at Jhagadia (Gujarat) for Rs 29.24 crore, to manufacture Croscarmellose Sodium (CCS) at Kurnool (Andhra Pradesh) amounting Rs 32.30 crore and the remaining for general corporate purposes.
Investors who wish to subscribe to Sigachi Industries IPO can bid in a lot of 90 equity shares and multiples thereafter. At the upper price band, they will be shelling out Rs 14,670 to get a single lot of Sigachi Industries. The shares will be listed on both BSE as well as NSE.
The applicants also must note that the cut-off time for UPI mandate confirmation is Monday, November 8, 2021, upto 12:00 pm. If they fail to do so then their application may not be considered.
Unistone Capital is the book-running lead manager to the IPO while Bigshare Services is the registrar of the issue.
Before heading into the IPO, Sigachi Industries raised over Rs 37.62 crore (Rs 37,62,85,500) from two anchor investors. In the regulatory filing, Sigachi Industries informed that under anchor investors portion in the public issue 23,08,500 equity shares have been subscribed at a price of Rs 163 per share.
The anchor investors comprise of 3 Sigma Global Fund and Nexus Global Opportunities Fund.
The research team at Anand Rathi Share and Stock Brokers in its IPO note has recommended a “Subscribe” to the offer.
Anand Rathi Research noted, “At the upper end of the IPO price band, Sigachi Industries Ltd. is offered at P/E of 15.1x its TTM earnings, with a market capitalization of ₹5,011 Million. Given that the company is one of the leading manufacturers of Microcrystalline Cellulose in India with over 30 years of experience, Pan India and International market presence, experienced management team and investment led future growth with high RoNW of 32.12% in FY21 and reasonable valuation. – We give this IPO a “Subscribe” rating.”
The share allotment is likely to take place on Wednesday, November 10, 2021, and the shares are expected to be listed on Monday, November 15, 2021, according to the timeline given in the red herring prospectus (RHP).