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Aether Industries IPO in progress: Should you subscribe to issue?

Aether Industries IPO

Aether Industries IPO in progress

Aether Industries IPO – Aether Industries, a specialty chemical company, launched its initial public offering (IPO) today. The IPO has a Rs 808 crore issue size. The IPO consists of a Rs 627 crore fresh issuance and a Rs 181 crore offer for sale. On May 23, the company raised Rs 240.32 crore from anchor investors. The company informed the stock exchanges that it has allocated 37,42,495 shares to anchor investors at a price of Rs 642 per share. 
The anchor share allotment attracted 7 DIIs and 6 FPIs, including SBI Mutual Fund, Ashoka India Opportunities Fund (White Oak), The Nomura Trust, and Goldman Sachs Funds. 
Institutional investors who subscribe to an IPO before it goes public are known as anchor investors. Anchor investors typically invest in an offering the day before the IPO opens. They must bid for the shares within the price range set for the IPO. During the offering, each anchor investor must contribute a minimum of Rs 10 crore. 
The stock offering will end on May 26. The corporation is selling its shares between Rs 610 and Rs 642 per share. 
The IPO’s lot size is 23 shares, and the price per share is Rs 14,766. By spending Rs 1,91,958, a retail individual investor can bid on up to 13 lots or 299 shares.

Aether Industries IPO

The issue’s book running lead managers are HDFC Bank Limited and Kotak Mahindra Capital Company Limited. The shares will be distributed on May 31 and are expected to be listed on the BSE and NSE on June 3. 
The IPO’s registrant is Link Intime India Private Ltd. 
The proceeds of the public offering will be used to prepay or return all or a portion of the company’s outstanding borrowings, as well as cover capital expenditure requirements for the manufacturing facility. 
The post-issue trailing twelve months multiple P/E works out at 75.6 times (at the upper end of the issue price band), which is reasonable given Aether Industries’ historical top-line and bottom-line CAGRs of 50% and 75%, respectively, through FY19-21. Aether Industries also boasts a diverse customer base, a solid financial history, and a superior return on equity. We believe this valuation is reasonable in light of all the favourable considerations. As a result, we recommend that investors subscribe to the issue,” the brokerage added. 
The IPO has been assigned a ‘Subscribe with Caution’ call by Choice Broking.