Laxmi Organics IPO bidding will begin on March 15, 2021. Before the offer opens, let’s look at all the critical pointers associated with the proposal.
- The original Laxmi Organic IPO size has got reduced from Rs 800 crores to Rs 600 crores. The company mopped up Rs 200 crores through a pre-IPO placement route
- The issue containing Rs 300 crores each of fresh scrips and OFS shares from the promoter Yellow Stone Trust will launch in the price band of Rs 129-130 per share
- Not less than 35 percent of the Rs 600 crore IPO is reserved for retail-individual investors. Almost half of the issue size will go to qualified institutional investors and 15 percent to non-institutional investors
- Retail investors need to apply for a minimum lot size of one, containing 115 shares and increase their bidding up to 13 lots of 1495 shares
- The two-days Laxmi Organic IPO bidding window will close on March 17, 2021
- The listing data for the IPO is March 25, 2021
- Axis Capital and DAM Capital Advisor are the leading book managers for the IPO, and Link InTime India Pvt. Ltd. is the registrar of the offer
- At the upper price limit of Rs 130, the IPO is 45x of FY20 EPS of Rs 2.86
- The company will use the proceed from the IPO towards building a manufacturing facility for flurocapacity chemicals, repayment of borrowing, and meeting general corporate expenses
Laxmi Organic is a specialty chemical producer with strong financials
Laxmi Organic is a leading producer of acetyl intermediates and specialty intermediates with two manufacturing units in Mahad, Maharastra. The company is almost three decades old. Over the years, it has steadily increased its footprints across geographics, exporting its products to over 30 countries, including China, Netherlands, the US, UK, and the United Arab Emirates. The company has several MNC clients and shares long term relationships with most. Laxmi Organic remained the largest exporter of ethyl acetate in FY20.
On the financial front, the company posted a cumulative turnover of Rs 1396.08 crores in the last three FYs from 2018 to 2020. During the first six months of FY 21 that ended in September 2020, it earned a net profit of Rs 45.48 crores against a turnover of Rs 814.36. In the last three fiscals, Laxmi Organic posted an average EPS of 2.90 and an average RoNW of 16.94 percent.
Laxmi Organic has listed peers like Aarti Industries, Fine Organic, Navin Fluorine, Rossari Biotechand SRF with P/E of 45.16, 33.01, 62.14, 29.22, 71.02, and 42.26, respectively. Against industry average, Laxmi Organic has a P/E of 37.68. The company’s current paid-up capital is Rs 48.12 crores, which will stand enhanced to Rs 52.73 crores post-IPO.
Market specialists asked investors to ‘subscribe’ to Laxmi Organic IPO as a long-term bet.