Kronox Labs shares will start trading on the stock exchanges on Monday. Before the listing, the company’s shares are trading at a premium of Rs 40 in the grey market.
Based on the upper price band of Rs 136, the stock is expected to list at a 30% premium on the exchanges.
However, it’s important to remember that grey market premiums are only an indication of demand in the unlisted market and can change quickly.
The IPO was very popular, getting subscribed 117 times, thanks to strong interest from both non-institutional and institutional investors.
Kronox Lab Sciences is well-positioned in the specialty fine chemicals sector. Their wide range of products serves various industries, offering long-term growth potential. The company has an advantage due to high entry and exit barriers caused by strict manufacturing processes.
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Analysts caution that investors should be aware of risks like foreign exchange fluctuations due to the company’s international market exposure.
“The company is not using its full production capacity, and limited product quantities might limit revenue growth in some areas. Despite these factors, Kronox’s strong fundamentals, high subscription rate, and significant GMP suggest a good listing,” said Shivani Nyati, Head of Wealth at Swastika Investmart.
Kronox’s Broad Product Portfolio
Kronox Lab Sciences produces high-purity specialty fine chemicals for various industries. Their products are used in pharmaceuticals, nutraceuticals, scientific research, agrochemicals, metal refining, personal care, and animal health products, among others.
Over the years, they have expanded operations and their global reach, with customers in over 20 countries including the US, Argentina, Mexico, Australia, and Egypt. Export revenues have grown at a CAGR of 37.46% from FY21-23.
For 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, and Kfin Technologies is the registrar.
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