TheNFAPost Podcast
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Mumbai, NFAPost: Speciality Chemicals manufacturer Rossari Biotech’s IPO of Rs.496 crore which was oversubscribed about 80 times had a blockbuster Listing on Day 1.

It is interesting to note that Rossari Biotech’s IPO is happening four months of inactivity in the IPO market. On listing day the share price discovered in the pre-market opening session was Rs. 669, a premium of 57% over the offer price of Rs. 425.

The share hit the upper circuit during intraday trades on both the BSE (Rs.804) & NSE (Rs.803.1), a 20% circuit to the discovered price.

The stock closed around Rs.742 on both the BSE & NSE, a 75% gain to the offer price of Rs.425 rewarding investors on Day 1. The Market Capitalization of the Company post today’s closing price stands at Rs.3,850 crores.

Speciality chemical manufacturer

Founded in 2009 by technocrat entrepreneurs Edward Menezes and Sunil Chari, Rossari Biotech is a leading speciality chemical manufacturer catering to the  to the FMCG sector, Apparel industry, poultry and animal feed industry. Apart from India, it has operations in 17 countries including Vietnam, Bangladesh and Mauritius.

Speaking on this momentous occasion, Rossari Biotech Limited Managing Director Sunil Chari said the company is truly overwhelmed and humbled to have witnessed such a strong opening of the company’s stock.

“It is happy to see that at BSE after oversubscription of almost 79.37 times, considering it was the first IPO to have been launch in these pandemic times and turbulent market conditions,” said Rossari Biotech Limited Managing Director Sunil Chari.

Adding to the stocks overwhelming listing on the bourses, Rossari Biotech Executive Chairman Edward Menezes said the company is very thankful to its investors for expressing their confidence.

“We also stand firmly in our resolve and look forward to work towards optimum utilization of fund for repayment of debts, funding working capital requirements and general corporate purposes. We are grateful to our partners, customers and investors who have been a part of our journey, with us,” said Rossari Biotech Executive Chairman Edward Menezes.

IPO buzz during Covid pandemic

Commenting on the IPO, BSE CEO Ashishkumar Chauhan said he is delighted to welcome Rossari Biotech to the BSE family at a time when there is a long hiatus in IPO since Covid epidemic started.

“Rossari Biotech’s success in retail, HNI and institutional segments brings a good omen and shows a tremendous appetite for good quality equity paper in Indian markets. BSE has been raising funds for corporates by way of bonds, commercial papers, SME, start-up and raising rights issues during the Covid period. In the financial year 2020-21, from April 1, 2002 till date, BSE has helped India Inc raise more than Rs 4.05 lakh crores,” said BSE CEO Ashishkumar Chauhan.

According to Arvian Research, the net proceeds from the issue will be utilised for funding working capital requirements, repaying certain debt availed by the company and for general corporate purposes. The company, which had filed its draft papers with Sebi in December 2019, received clearance from the regulator in February to launch the IPO. The IPO was managed by Axis Capital and ICICI Securities.

Fund raising strategy

The IPO comes after Rossari Biotech raising Rs 148.87 crore from anchor investors, and Indian fund houses SBI Mutual Fund, HDFC Mutual Fund and ICICI Mutual Fund. The three funds invested Rs 14 crore each in their various schemes. Apart from these, Ashoka India Opportunities Fund and Nippon India Small Cap Fund also invested Rs 14 crore each in the company.

Besides Abu Dhabi Investment Authority, Axis Mutual Fund, Goldman Sachs India and HDFC Life Insurance Co, other investors who participated in the fundraising include HSBC Global Investment Funds, IIFL Special Opportunities Fund – Series 4, Kotak Mahindra (International), Malabar India Fund, Mirae Mutual Fund and Sundaram Mutual Fund.

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