Archean Chemical Industries IPO opens — 10 things to know before you subscribe to it

Nov 9, 2022

By: Bhakti Makwana

IPO opening

The IPO of specialty chemical company Archean Chemical Industries opened on November 9 and will close on November 11. The price band of the IPO is ₹386- ₹407 a share.

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Robust demand in grey market

The grey market premium (GMP) for the company’s shares fell to ₹70 per share from ₹90 earlier. GMP is the premium at which IPO shares are traded in an unofficial market before they are listed on the stock exchanges.

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How much money will the company raise via IPO?

The IPO comprises a fresh issue of shares worth ₹805 crore along with an offer for sale of ₹657 crore by promoters and existing shareholders.

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What does the company do?

The company is a speciality marine chemical manufacturer in India, focused on producing and exporting bromine, industrial salt and sulphate of potash to customers around the world.

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Where will the IPO money be deployed?

The proceeds from the fresh issue of shares will be utilised towards redemption of non-convertible debentures and for general corporate purposes.

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Sales dependent on China

Majority of the company’s sales are derived from selling to Chinese companies. As of FY22, 36.3 percent of its revenue came from China, 29.68 percent from India, 19.46 percent from the rest of Asia, 6.23 percent from Japan, 5.62 percent from South Korea, 1.79 percent from Africa and 0.92 percent from Europe.

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Profitability almost tripled in FY22 from a year earlier

The profitability of the company has almost tripled to ₹188 crore in FY22 from ₹66 crore in FY21.

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Anchor investors

Archean Chemical Industries raised ₹658 crore from anchor investors ahead of the IPO. It allocated 1.61 crore shares to 42 anchor investors at the upper price band of ₹407 per share.

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Peer companies

Some listed peers of the specialty chemical company include Tata Chemicals, Deepak Nitrite, Aarti Industries and Neogen Chemicals.

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Allotment date and listing date

The company’s shares are scheduled to be allotted on November 16 and will be listed on November 21 on the BSE and the NSE.

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Startup funding hits a 5-year low in July-September quarter