Archean Chemical Industries lists at 10% premium amid falling markets

• Shares of Archean Chemical Industries listed at ₹449 against the allotment price of ₹407 per share.
• Overall, the IPO saw strong demand from investors amidst volatile market conditions, being subscribed 32.54 times.
• The market capitalisation of the company stood at ₹5,525 crore.

Shares of specialty chemical company Archean Chemical Industries listed at ₹449 per share against the issue price of ₹407, on Monday.

The stock debuted at a 10% premium on the bourses. However this is much lower than the grey market expectations which predicted it to list at a 30% premium. GMP is the premium at which IPO shares are traded in an unofficial market before they are listed on the stock exchanges.

The stock markets tanked in early trade as the Sensex fell by 463 points, and Nifty declined 129 points.

The market capitalisation of the company stands at ₹5,525 crore, according to BSE data.

The IPO had received strong demand from investors amidst volatile market conditions, as it was subscribed 32.54 times.

The qualified institutional buyer portion was hugely subscribed 48.58 times. The portion reserved for non-institutional investors witnessed a subscription of 15.35 times. Retail portion also saw good demand with 10.25 times subscription.

This year, 26 IPOs made their stock market debut on the BSE mainboard. Most of them gave positive listing gains, except seven issues. Here are the top five IPOs with highest listing gains in 2022.
(Source: BSE)

Manufacturer of ‘Sulphate of potash’
The company is a speciality marine chemical manufacturer in India, focused on producing and exporting bromine, industrial salt, and sulphate of potash to customers around the world.

It also exports them to countries like China, Japan, South Korea, Qatar, Belgium and the Netherlands. In FY22, it exported to 18 global customers across 13 countries.

Majority of the company’s sales are derived from selling to Chinese companies. As of FY22, 36.3% of its revenue comes from China, 29.68% from India, 19.46% from rest of Asia, 6.23% from Japan, 5.62% from South Korea, 1.79% from Africa and 0.92% from Europe.

The company said in the draft filing to SEBI that it faces pricing pressures from foreign companies that make products at cheaper prices. “We face pricing pressures from foreign companies, principally in Israel (Dead Sea area), China and North America, that are able to produce chemicals at competitive costs and consequently, may supply their products at cheaper prices,” said the company in its red herring prospectus (RHP).

The profitability of the company has more than doubled to ₹188 crore in FY22 from ₹66 crore in FY21.
Source: RHP

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