December 22, 2021 10:54 AM
HP Adhesives IPO
Adhesives and sealants company HP Adhesives will finalize the basis of its share allotment today after the company received healthy response for its public offer on December 15-17.
The company’s IPO was subscribed 20.96 times, attracting bids for 5.29 crore equity shares against an issue size of 25.28 lakh shares.
While retail investors bid for 81 times the reserved portion, the non-institutional investors’ portion was subscribed 19 times and qualified institutional investors bid for 1.82 times.
The Rs 126-crore public issue of HP Adhesives comprised fresh issue of Rs 113.43 crore and an offer-for-sale of Rs 12.52 crore by Anjana Haresh Motwani. The price band for the offer was set at Rs 262-274 per equity share.
Here’s how to check the share allotment status on the websites of BSE and the IPO registrar:
On the BSE website, follow these three steps:
Select issue type (Equity), and issue name (HP Adhesives)
Enter Application Number and PAN Number
And finally check box (I’m not a robot) and click on search button
On the IPO registrar’s website, follow these steps:
Select Company Name (HP Adhesives)
Select and accordingly enter either PAN Number, or Application Number, or DP/Client ID, or Account Number / IFSC
And finally enter captcha and click on submit button
While brokerage Capital Market remained ‘neutral’ on the issue, Marwadi Shares recommended to ‘subscribe’ and Choice Broking suggested to ‘subscribe with caution’. However, Religare Broking recommended investors to ‘subscribe with a long term view’.
“At the higher price band of Rs 274, the company is demanding a TTM P/E multiple of 49.2x, which seems to be at premium considering the small business size. Thus, we assign a ‘subscribe with caution’ rating for the issue,” Choice Broking said in a note. “Though the company’s long-term prospects look good with a strong business model, we believe the current valuation captures all positives and leaves hardly any meaningful upside for investors with stretched valuation,” Reliance Securities pointed out.
Proceeds from the fresh issue will be used for working capital requirements, and expansion of production capacity at the existing manufacturing facility in Raigad, Maharashtra, and at an additional unit on the adjacent plot.
The company will also expand its existing installed capacities, and add new products to the existing portfolio through fresh issue money.
HP Adhesives clocked a profit of Rs 10.06 crore in FY21 against a loss of Rs 4.67 crore a year back, but its revenue increased to Rs 118.16 crore from Rs 95.47 crore in the same period.
Profit in the six months to September 2021 jumped to Rs 3.1 crore, compared to Rs 2.93 crore in the corresponding period last fiscal. During the same period, revenue surged to Rs 70.51 crore from Rs 44.92 crore.
Shares of HP Adhesives were trading at a premium of Rs 50 in the grey market as per data from IPO Watch, about 18 percent higher than the issue price.
After the finalisation of the share allotment, unsuccessful bidders will get refunds on December 23, while successful investors will get shares in their demat accounts on December 24.
The company is expected to list on December 27 on the BSE and the National Stock Exchange.