Aether Industries Limited IPO — Checkout company balance sheet, performance and analysts views in 10 points

May 24, 2022

By: Kritti Bhalla

Aether Industries IPO opens today

Specialty chemical maker Aether Industries is all set to launch its initial public offering (IPO) today, between May 24 and 26. The price band of the company’s public issue has been set at ₹610-642 apiece.

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What does Aether do?

Aether Industries — which is based out of Surat, Gujarat — focuses on producing advanced intermediates and specialty chemicals involving complex, differentiated chemistry and technology core competencies.

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Its customers

It produces 24 products, of which it is the world leader in four - and the sole manufacturer in India of seven. The company’s products are used in pharmaceutical, agrochemical, material science, coating, high-performance photography, additive as well as oil and gas segments of the chemical industry.

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Key risks in IPO

According to Angel One, the company’s business is heavily dependent on manufacturing facilities and any shutdown or slowdown in manufacturing facilities will have an adverse impact on the company.

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It adds ₹100 crore to its revenues every year

Aether Industries Limited earned ₹454 crore in the fiscal year 2021 that ended in March last year, while its profits were at ₹71 crore. The company’s revenue has been increasing by at least ₹100 crore on an annual basis. Its revenue stood at ₹109 crore in FY18, ₹203 crore in FY19 and ₹303 crore in FY20.

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Profits have been steady too

The specialty chemical makers’ profits too have been increasing steadily, with ₹7.7 crore in FY18, ₹23 crore in FY19, ₹40 crore in FY20.

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Should you subscribe?

Religare Broking has given it a neutral rating as the company’s valuation seems expensive despite its stable placement in the growing industry, while Angel One believes the valuation is reasonable and one should subscribe to the IPO. Axis Capital, however, has not given any rating to the stock.

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How much can you bid?

An investor can bid for a minimum of one lot of 23 shares, totaling to ₹14,766 per lot. The maximum bid can be placed for 13 lots, totaling to ₹191,958. The company’s shares were trading at a premium of ₹10 in the grey market.

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How much does the company plan to raise?

Aether Industries intends to raise close to ₹808 crore through this IPO. Out of this, ₹627 crore will be raised through fresh issue of equity shares while the remaining ₹181.04 crore will be raised through offer for sale (OFS).

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How does it plan to use this capital?

Aether Industries Limited plans to use ₹637 crore of fresh issue to fund capital expenditure requirements of greenfield projects, repayment of outstanding borrowings and general corporate purposes.

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