On October 15, 2024, Shiv Texchem made a notable entry into the stock market, listing its shares at a significant 44% premium at ₹239 on the BSE SME platform. The enthusiasm around this IPO can be attributed to the company's robust business model and strong investor interest leading up to the listing.

Shiv Texchem operates primarily in the import and distribution of hydrocarbon-based chemicals, which are essential inputs across a wide range of industries, including paints and coatings, printing inks, agro-chemicals, specialty polymers, pharmaceuticals, and specialty industrial chemicals. Their diverse portfolio includes critical product families such as Acetyls, Alcohol, Aromatics, Nitriles, Monomers, Glycols, Phenolic, Ketones, and Isocyanates.

The company’s initial public offering (IPO) amounted to ₹101.35 crores, consisting entirely of a fresh issue of 61.05 lakh shares. The subscription period for the Shiv Texchem IPO opened on October 08, 2024, and closed on October 10, 2024. With the allotment expected to be finalized on October 11, the listing took place shortly thereafter, confirming the anticipation surrounding this IPO.

Investment Details and Subscription Highlights

The share price band for the Shiv Texchem IPO was set between ₹158 to ₹166, with a minimum lot size of 800 shares. Retail investors needed to invest a minimum of ₹1,32,800, while High-Net-Worth Individuals (HNIs) were required to subscribe to at least 2 lots, totaling ₹2,65,600.

As of 7:00 PM on October 10, 2024, the IPO saw overwhelming demand, being oversubscribed by 145.67 times on its final subscription day. This strong investor response was further supported by a Grey Market Premium (GMP) that indicated potential listing gains, estimated between ₹20 to ₹25 per share. However, it's important to note that GMP values fluctuate based on market demand and supply, making them a less reliable indicator for actual trading.

The anchor investors played a crucial role in boosting confidence in the Shiv Texchem IPO. The company managed to raise ₹28.87 crores from anchor investors at the upper price band of ₹166, allocating 17,39,200 equity shares to these institutional investors. This strong backing from Qualified Institutional Buyers (QIBs) reflects a solid endorsement of Shiv Texchem's business prospects.

Financial Performance and Projections

Looking at the company's financial health, the restated total income for the quarter ending June 30, 2024, was ₹56,604.99 lakhs, showing a steady increase compared to previous fiscal years. The restated EBITDA for the same quarter was ₹1,886.24 lakhs, while the profit after tax stood at ₹1,005.89 lakhs. For the fiscal years 2024, 2023, and 2022, the company's performance has shown consistent growth, indicating a promising trajectory for future earnings.

With a pre-issue EPS of ₹17.64 and a post-issue EPS of ₹12.99, Shiv Texchem's P/E ratio was 9.41x pre-issue and 12.77x post-issue. These valuation metrics suggest that the IPO is fairly priced, considering the company's robust Return on Capital Employed (ROCE) of 26.99% and Return on Equity (RoE) of 19.08% for FY24.

Investment Recommendations

Despite the strong listing gains and promising financial metrics, the recommendation for investors leans towards caution. Analysts suggest avoiding the Shiv Texchem IPO for short-term listing gains or long-term investment purposes, primarily due to market conditions and the inherent risks associated with new listings.

Checking Allotment Status

For investors who participated in the IPO, the allotment date is set for October 11, 2024. To check the allotment status online, follow these steps:

Navigate to the IPO allotment status page.

Select Shiv Texchem Limited IPO from the dropdown list of IPOs.

Enter your application number, PAN, or DP Client ID.

Submit the details to view your allotment status.

Utilization of Funds

The proceeds from Shiv Texchem's fresh issue will primarily be directed towards long-term working capital requirements (₹7,500.00 lakhs) and general corporate purposes. This strategic allocation of funds aims to bolster the company's operational capabilities and expand its market reach in the competitive landscape of chemical distribution.

In conclusion, Shiv Texchem's entry into the stock market is marked by an impressive listing, reflecting strong investor sentiment and confidence in its business model. The company's focus on hydrocarbon-based chemicals positions it well within diverse industrial applications, suggesting a robust future as it continues to grow and adapt in a dynamic market.

For those interested in upcoming investment opportunities, you can explore more at Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today - Finance Saathi and Top News Headlines - Share Market News, Latest IPO News, Business News, Economy News- Finance Saathi.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst & Finance Saathi Telegram Channel for Regular Share Market, News & IPO Updates.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.