The initial public offering (IPO) of Neochem Bio Solutions Ltd. commenced its subscription journey today, December 2, marking a significant step for the specialty chemicals company. The public issue, which aims to raise ₹44.97 crore, will remain open for investors until Thursday, December 4. This offering is entirely a fresh issue of 46 lakh equity shares, with no existing shareholders offloading their stake.
IPO Details and Key Dates
Investors can bid for shares in the price band of ₹93 to ₹98 per share. The allotment of shares is expected to be finalized on Friday, December 5. Successful allottees are likely to see the shares credited to their demat accounts by Monday, December 8, which is also the day refunds will be initiated for unsuccessful bidders. The company's equity shares are scheduled to make their debut on the NSE SME platform on Tuesday, December 9.
The lot size for the IPO is set at 1,200 shares. This means retail investors, who must apply for a minimum of 2 lots, will need to invest at least ₹2.35 lakh at the upper price band of ₹98 per share.
Utilisation of Funds and Anchor Investment
Neochem Bio intends to channel the net proceeds from the IPO towards strengthening its financial footing and fueling growth. A significant portion, ₹23.90 crore, is designated for meeting long-term working capital requirements. Another ₹10 crore is earmarked for the repayment or prepayment of certain outstanding borrowings. The remaining amount will be used for general corporate purposes.
Ahead of the public opening, the company successfully secured ₹12.77 crore from anchor investors on December 1. Notably, ace investor Mukul Agarwal's Sanshi Fund emerged as the largest participant in this anchor round, accounting for over 39% of the total allocation.
Subscription Status and Investor Sentiment
By 3:10 PM on the first day of bidding, the IPO was subscribed 0.55 times. The quota reserved for retail individual investors (RIIs) saw a subscription of 0.36 times, while the non-institutional investors (NIIs) portion was booked 0.41 times. The qualified institutional buyers (QIBs) category was fully subscribed at 1 time. In total, bids were received for 16.87 lakh shares against the 30.52 lakh shares on offer.
The overall allocation for the net offer is split with 47.38% for QIBs, 33.26% for retail investors, and 14.28% for NIIs.
Market sentiment, as gauged by the grey market premium (GMP), appears cautious. On December 1, the GMP for Neochem Bio was ₹0, suggesting the stock might list at or around its issue price. The GMP reflects the premium investors are willing to pay in the unofficial market before the listing.
Vivro Financial Services is acting as the book running lead manager for the issue, while MUFG Intime India is the registrar. Rikhav Securities Ltd. is the market maker for the company.
About Neochem Bio Solutions Ltd.
Incorporated in 2006, Neochem Bio Solutions operates in the specialty performance chemicals segment. The company supplies crucial products to a wide array of industries. Its portfolio supports sectors including:
- Textile and garment washing
- Home and personal care (HPC)
- Institutional and industrial cleaning
- Water treatment, paints and coatings
- Paper and pulp, construction, rubber, and dyes and pigments
The company offers a comprehensive range of textile auxiliaries for pre-treatment, dyeing, finishing, printing, and coating, designed for all fabric types and compatible with modern processing machinery.
