Platinum Industries IPO subscribed 13.35 times on Day 2 so far; NIIs portion booked 23x

The initial public offering (IPO) of Platinum Industries continued to witness a strong response from the investors during the second day of the bidding process. The issue, which had kicked-off for bidding on Thursday, February 22, was overall subscribed 7.97 times on day one.

The Mumbai-based Platinum Industries is selling its shares in the price band of Rs 162-171 apiece. Investors can apply for a minimum of 87 shares and its multiples thereafter. It is looking to raise Rs 235.32 crore via IPO, which entirely includes a sale of 1,37,61,225 fresh shares

According to the data, the investors made bids for 12,85,76,691 equity shares, or 13.35 times, compared to the 96,32,988 equity shares offered for the subscription by 12.30 pm on Wednesday, February 28. The three-day bidding for the issue will conclude on Thursday February 29.

The allocation for retail investors was subscribed 16.82 times, while the portion reserved for non-institutional investors saw a subscription of 22.90 times. However, the quota set aside for qualified institutional bidders (QIBs) attracted bids for 10 per cent as of the same time.

Platinum Industries, which was incorporated in August 2016, specializes in producing stabilizers. The company manufactures PVC stabilizers, CPVC additives and lubricants. The company's products are used in PVC pipes, PVC profiles, PVC fittings, electrical wires and cables, SPC floor tiles, Rigid PVC foam boards, packaging materials and more.

The grey market premium of Platinum Industries has surged sharply after day one's response as the company is commanding a premium of Rs 98-100 in the unofficial market, suggesting a listing pop of more than 58 per cent for the investors. However, the premium in the grey market stood around Rs 32-35 earlier, when the issue was announced.

Analysts are mostly positive on the issue of electrical appliances and products, which has been able to fetch 'subscribe' ratings from them. Brokerages, so far tracking the issue, have given Platinum Industries a thumbs-up on the back of its strong growth potential, expansion in the global markets, reasonable valuations and sound track record over the years.

Platinum Industries is a multi-product player in the high barrier to-entry specialty chemicals sector. Its unwavering focus on R&D and sustainability, coupled with a varied product portfolio catering to multiple industries, positions the company for continued success. It has demonstrated consistent financial performance, reflected in steady top-line and bottom-line growth, said Swastika Investmart.

"However, some risks necessitate careful consideration. These include dependence on a limited customer base, underutilization of manufacturing capacity, vulnerability to fluctuations in industry demand, and potential pricing pressures from customers. Despite these risks, the valuation appears reasonable," it said with a 'subscribe' rating citing its strengths and growth potential.

Ahead of its IPO, Platinum Industries raised Rs 70.6 crore from seven anchor investors, allocating them 41,28,237 shares at Rs 171 apiece. The company has reserved 50 per cent of the offer to qualified institutional bidders (QIBs), with non-institutional investors receiving 15 per cent, and the remaining 35 per cent allocated to retail investors.

Platinum Industries caters to diversified industries and offers a varied product portfolio and has a rigorous quality control procedure in place. It has a sustainable R&D facility that is focused on developing innovative products to suit customer needs and market demands and has reported consistent financial performance, said Hensex Securities.

"Their revenue from operations grew at a CAGR of 61 per cent to Rs 231.48 crore in FY23 and PAT grew to Rs 26.51 crore during the same period, being a specialty chemical company, it works in a High entry barrier Industry. The company plans to establish a project in Egypt through its subsidiary Platinum Stabilizers Egypt LLC," it added with a subscribe rating for the issue.

Unistone Capital is the sole book running lead manager of the Platinum Industries IPO, while Bigshare Services is the registrar for the issue. Shares of the company will be listed at both BSE and NSE with March 5, Tuesday as the tentative date of debut.

 

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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