Brokerage houses have sounded positive recommendations on the Shree Pushkar Chemicals & Fertilisers IPO. The IPO of the Mumbai-based company will remain open between 25 August and 27 August for subscription in a price band of INR61 – 65 per share. The IPO will mobilize INR70 crore through a combination of fresh equity and offer for sale.
Shree Pushkar Chemicals & Fertilisers plans to use IPO proceeds for acquisition of a factory and setting up production and effluent treatment plants. The biggest chunk of IPO proceeds will be used towards setting up a new facility for production of reactive dyes, H-Acid, and Vinyl Sulphone. The company plans to invest INR41.6 crore in this regard while INR4.9 crore will be used towards establishing an effluent treatment plant at its existing facility.
Analysts at some brokerage houses have come up with positive recommendations about the prospects of the IPO. Here are a few snapshots:
Analysts at Hem Securities have recommended investors to SUBSCRIBE to the issue for listing gains. “The company is bringing the issue at price band of Rs.61-65 at price-earnings multiple of 9.89-10.53 on post issue FY15EPS at lower and higher band. The company has made a pre IPO allotment of 7,69,235 equity shares at a price of Rs.65. Considering the wide portfolio of products; integrated manufacturing with zero waste; strong distribution network and decent fundamentals; the company seems good. Hence we recommend investor to SUBSCRIBE the issue only for listing gains”, said the brokerage house in a research note.
Counting several positives in Shree Pushkar Chemicals & Fertilisers, Ajcon Global has said the issue is priced fairly. “With due consideration to factors like a) one of the few integrated manufacturers of wide range of Dye Intermediates in India; b) one of the zero waste manufacturer in the Dye Intermediates industry in India; c) diversified client base; d) improving return ratios; e) strong past financial performance; e) positive operating cashflow in last three years; f) favourable capital structure; we believe the company’s issue is fairly priced. Hence, we recommend SUBSCRIBE to the issue,” opined Ajcon Global.