Speciality chemicals firm Clean Science and Technology made a bumper debut on the stock market on Monday.
The company’s share price opened with a nearly 100 per cent premium on its issue price of Rs 900, marking a strong listing after its initial public offering (IPO).
Shares of Clean Science and Technology got listed with a premium 98.27 per cent at Rs 1,784.40 apiece on the Bombay Stock Exchange (BSE). On the National Stock Exchange, the shares of the company were listed at Rs 1,755 — a premium of over 95 per cent.
At 11:15 am, shares of Clean Science and Technology were trading at Rs 1,600 on the BSE and Rs 1,599.75 on the NSE. Although listing gains have eroded slightly, the company’s shares are still trading much higher than the issue price.
ANALYSTS REMAIN OPTIMISTIC
Even before the listing, analysts were optimistic about the company’s initial public offering, given its strong financials, industry position, diversified product portfolio, strong client base and R&D ventures.
The company manufactures critical speciality chemicals such as performance chemicals, pharmaceutical intermediates, and FMCG chemicals.
The company enjoys a strong customer base, including direct-use manufacturers and institutional distributors. It may be noted that a major of revenues the company generates is through direct sales to customers. Some major customers of the company are Bayer AG, SRF and Vinati Organics.
Clean Science Technology’s financial performance has also been impressive over the years, and it is a dominant player in the speciality chemical manufacturing segment. Analysts have said there has been a consistent improvement in the margins of the company.
The company’s earnings before interest, tax, depreciation and amortization (EBITDA) improved sharply from 24.8 per cent in FY19 to 38.7 per cent in FY21. It also enjoys a healthy balance sheet with a debt-to-equity (D/E) ratio of 0.1x as of FY21.
The return ratios of the company including return on equity and return on capital employed remains impressive at 38 per cent and 26 per cent, respectively.
In view of the strong financials and the grey market premium, most brokerages had assigned a ‘subscribe’ rating to the firm’s IPO. Brokerages also remain positive about the company’s long-term performance.
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