The complete OFS IPO issue aims to raise a total of Rs. 937 crore in which the promoters will sell off 6,331,674 equity shares. The price band for the OFS is kept at Rs. 1470- 1480 which will remain open until January 31, 2018.
This is the company's second attempt to raise funds via IPO. Earlier in the year 2011, it took the primary market route to raise Rs. 200 crore but later withdrew due to weak response from investor class.
Here's a low down on the offer by the company:
1. Company profile: Speciality ingredients manufacturer has a robust product portfolio and supplies to some of the leading FMCG brands in India and AMET region.
2. Issue details: The bid for the issue can be made for a minimum of 10 equity shares and in multiples of 10 shares thereon. Through the OFS, company aims to reap up the benefits of the stock listing on the exchange and also the shareholding of the company's promoters post the issue will get reduced to 71%, a drop of 6% from the current.
Edelweiss Financial Services, JM Financial Institutional Securities and ICICI Securities will be all lead managers to the issue.
3. Company financials: CAGR of the company on earnings has stood at 25% for the last 3 years time. The growth rate is likely to sustain given the strong product profile of the company with higher penetration across geographies.
4. Valuations: The issue is valued at a fair rate with a P/E multiple of 35 on H1FY18 EPS at the higher price band of Rs. 1480 per share.
5. Conclusions: Fair valuations and strong fundamentals have been cited as prime reasons basis which several brokerages have suggested a Subscribe rating to the issue.
Nonetheless, one concern with the company that cannot be overlooked is its high dependency on manufacturing facilities and any risk posed that proves unfavourable to the manufacturing industry can accrue losses for the company and hence to investors in the OFS by Galaxy Surfactants.