Kronox Lab Sciences IPO Oversubscribed 6x in Just an Hour – Retail and NII Investors Drive Demand

Kronox Lab Sciences’ initial public offering (IPO) saw a strong response from investors, with the issue being fully subscribed within an hour of opening. Overall, the subscription rate was nearly 6 times, mainly driven by enthusiastic interest from retail and non-institutional investors.

Retail and non-institutional investor categories were oversubscribed over 7 times, while the Qualified Institutional Buyer (QIB) category was subscribed 60%.

Offer Details

The IPO, closing on June 5, consists entirely of an offer for sale (OFS) of 95.7 lakh shares. All net proceeds from the IPO will go to selling shareholders Jogindersingh Jaswal, Ketan Ramani, and Pritesh Ramani, part of the promoter group.

The IPO reserves 50% for qualified institutional buyers, 15% for non-institutional investors, and the remaining 35% for retail investors.

In the unlisted market, Kronox Lab Sciences shares are trading at a premium of Rs 80.

Recommendations

Analysts suggest subscribing to the IPO due to the company’s diverse product portfolio, serving various end-user industries, and its strong positioning for sustainable growth.

The IPO is priced between Rs 129-136 per share, aiming to raise Rs 130 crore at the upper end.

Kronox Lab Sciences manufactures high-purity specialty fine chemicals used in pharmaceutical formulations, nutraceuticals, scientific research, agrochemical formulations, and other industries. Its export revenue has grown at a CAGR of 37.46% between FY21-23.

In the nine months ending December 2023, the company’s revenue from operations fell 9% to Rs 67.6 crore, while net profit after tax increased 10% to Rs 15.4 crore.

Pantomath Capital is the sole book-running lead manager for the IPO, with Kfin Technologies serving as the registrar.