The IPOs of the two companies' into different businesses shall open tomorrow and close on the same day i.e. July 9, 2021. Here's a quick comparison of the 2 IPOs on the various parameters:
Let us begin with first the company profile of the 2 companies' coming up with the public issue:
Company Profile Of Clean Science and GR Infra:
As per the company's website, Clean Science is a Maharashtra Pune-based fine chemical manufacturing and exporting company of India. The company develops unique chemical process in-house that are eco-friendly as well as competent on the cost parameter. Furthermore, for some of the specialty chemicals the company is the leading manufacturer globally.'
The company is a road Engineering, Procurement and Construction (EPC) company and has recently added railway sector to its portfolio. Also, the company is into manufacturing activities wherein it processes bitumen, manufactures thermoplastic road-marking paint, electric poles and road signage and fabricate and galvanize metal crash barriers.
Clean Science: The Rs. 1546 crore IPO of Clean Science is purely an OFS by existing shareholders and promoters and the entire proceeds shall be available to the entities' paring their stake. Further as per the company's Wholetime Diector the company has enough cash of Rs. 250 crore on its balance sheet.
IPO Price- Rs. 900
Peers for the company- Vinati, Fine Organics, Atul, Camlin, PI Industries
The IPO of GR Infra shall also be a complete OFS in the price band of Rs. 827-837 per share. The issue size of the offer is Rs. 963 crore. So, by and large the issue is being floated to providea liquidity opportunity to the existing shareholders of the company.
Peers of the company: KNR, PNC, IRB etc.
On the valuation front, GR Infra is said to be attractive commanding a P/E of 8.5 as against the industry average P/E of 16.73.
"In terms of the valuations, on the higher price band, GR Infra demands a P/E multiple of 8.5x based on FY21 post issue fully diluted EPS and EV/EBITDA of 6.5x post issue fully diluted FY21 EBITDA. Almost all listed peers are trading in the range of 11x - 45x and industry average is at 22x. Despite of reporting better return ratios compared to peers, GR Infra is valued at a significant discount to peers, said Ashika Research firm. Thus, issue looks attractive in terms of valuation.
Given the healthy growth prospects and considering the strong emerging opportunity for road infrastructure, strong order book with order book to sales ratio of 2.4x, timely execution of order, expand to new geographies and segments, strong financials and healthy balance sheet augur well for the company's performance going forward. Hence, it is recommended to "SUBSCRIBE" the issue.
Likewise, IPO Of Clean Science has also been given a 'Subscribe' call by Ashika Research on the premise that the company demands a P/E multiple of 48.2x based on FY21 post issue fully diluted EPS. Almost all listed peers are trading in the range of 42x - 77x and industry average is at 60x. Despite of reporting better return ratios compared to peers, CSTL is valued at discount to peers. Thus, issue appears attractive for
Further the research firm has given the following rationales
Given the healthy growth prospects and China plus one policy, largest manufacturer of certain specialty chemicals, expanding manufacturing facility, expanding R&D infrastructure, strong financials and healthy balance sheet augur well for the company's performance going forward. Hence, it is recommended to "SUBSCRIBE" the issue.
ICICI Direct has also iterated a 'Subscribe' call to the issue of Clean Science and said The company recorded revenue growth of 14% CAGR in FY19-21 supported by higher volume growth across the segments. With changes in the anisole manufacturing technology, it was able to improve gross margins, to a certain extent, and thereby OPM. At | 900, the stock is available at 48.2x FY21. We assign a SUBSCRIBE rating to the issue, added the brokerage report.
If you are having good cash flow you can consider investment into both of these IPO offers. Nonetheless, if you have two choose between the two, analysts have given a preference to the IPO of Clean Science as the company has been consistent with its financial performance, also GMP for the scrip is between Rs. 400- Rs. 450, suggesting almost 50% listing gains. Nonetheless, long term potential of the scrip is also good with good earnings expectation as the stock can hit a price of Rs. 2000 - Rs. 2500 in a short period.