Laxmi Organic Industries IPO gets strong response on Day 1, Retail Investors show good participation
The Laxmi Organic IPO is subscribed 2.28x times on Mar 15, 2021 5 pm. The public issue subscribed 4.34x in the retail category, 0.01x in the QIB category, and 0.49x in the NII category. The offer will close on March 17, 2021 and the company has fixed the price band at Rs 129 – Rs 130 per equity share.
The Laxmi Organic IPO is subscribed 2.28x times on Mar 15, 2021 5 pm. The public issue subscribed 4.34x in the retail category, 0.01x in the QIB category, and 0.49x in the NII category. The offer will close on March 17, 2021 and the company has fixed the price band at Rs 129 – Rs 130 per equity share.
Avinash Gorakshakar, Director Research at ProfitMart Securities says that Laxmi Organics is a leading manufacturer of Acetyl Intermediates and Specialty Intermediate, holds 30% market share in Indian ethyl acetate market, only Indian manufacturer of diketene derivatives and global footprint with customers in over 30 countries. Over last 2 years Revenue has grown at a CAGR of 5% ,with EBITDA margins 10%, ROE 16% in Fy20. The Balance sheet position of Laxmi Organics is stable and the Total Debt to EBITDA stands at <1x in FY20. Avinash said that the Valuation of Laxmi Organics are expensive. The Issue is coming at PE of 44x which is quite expensive as compare to industry average. Good listing gains expected in this counter.
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Laxmi Organic Industries Overview:
Laxmi Organic Industries is one of the leading manufacturers of Acetyl Intermediates and Specialty Intermediates. They are one of the largest manufacturers of ethyl acetate with a 30% market share in India and the only manufacturers of diketene derivatives with 55% market share in India in terms of revenue. Company’s products find application in end user industries such as pharmaceuticals, agrochemicals, dyes & chemicals, inks & coatings, paints, printing & packaging, flavors & fragrances, adhesives and other industrial applications. Contribution of exports to total revenue stands at 23.17% and is one of the largest exporters of ethyl acetate in India.
Laxmi Organic Industries Valuations:
Considering FY20 adjusted EPS of 2.66 on a post-issue basis, the company is going to list at a P/E of 48.82X with the market cap of Rs.34,276 million. The peers of the company namely Aarti Industries Ltd is at P/E of 24.92X and Fine Organics Industries Ltd is at 35.46X. Marwadi Financial Services recommends to ‘Subscribe’ this issue as long term prospects of this stock look promising with healthy demand from end user industry driving revenues for this company.
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05:33 AM IST