Laxmi Organic IPO is getting launched for subscription on Monday 15, March 2021, and will be available for subscription till Wednesday, March 17, 2021.
The company is looking to raise Rs.600 crore through public issue in an Offer for Sale of 97,01,809 Equity Shares, Ahead of the IPO, the Laxmi Organic has already raised Rs 180 crore it has decided to allocate 1.38 crore shares at Rs 130 to 15 anchor investors.
Which include Nomura India Equity Fund, Abu Dhabi Investment Authority, Goldman Sachs, Kuber India (Plutus), Theleme India Master Fund, Malabar India Fund, Ashoka India Opportunities Fund, India Acorn Fund, SBI Mutual Fund, ICICI Prudential Mutual Fund and Aditya Birla Mutual Fund.
The equity shares of Laxmi Organic are proposed to be listed on both BSE and NSE.
The Laxmi Organic IPO issue will be sold in the price band of Rs 129-130 per share and the minimum lot quantity is 115 shares and in multiples thereof translating to a minimum investment of Rs 14,950.
The latest Grey market premium price (GMP) for Laxmi Organic IPO’s were seen up by more than 81% and were trading around Rs.235 as of today, This means people are expecting it to open on listing day to be at least at Rs.230 or more.
Incase, the market falls on Monday you may see volatility in GMP of Laxmi organic.
Having said that, I would like to add here that many people underestimated Stovekraft IPO before it’s launch, however the share price made a high of Rs.545 above the pre-open IPO price band of Rs.384.
Likewise for HFFC (Home first finance) IPO, the GMP before launch was at about Rs.650 however the stock got listed at Rs.540 on the other hand for IRFC IPO many people recommended a BUY and GMP were also seen at quite high range but unfortunately it open at a discount price and is currently trading at Rs.25.40.
GMP does not mean in anyway a recommendation for an IPO, the financials of a company and its future prospectus tells a lot. Here is the thing no one can tell you whether the IPO will going to make a stellar debut or not, it is you who have to decide based on available information about the company.
Moreover the IPO’s now a days are very hot market every one wants to earn some quick money on listing day itself and there is nothing wrong about it.
Having said that, one must not forget to check the financials and do not fall for any recommendation from anyone, it is you hard earned money, you should decide whether to opt for the IPO or not.
You may watch various YouTube channels or read on different websites about recommendation for stocks and IPO, it is my humble suggestion and request please do not ever fall prey to it. Better than this is to invest in ETF’s?.
Therefore, whenever you are buying IPO make sure the money invested is not the one which you my need it urgently, always use extra money which you may not require in near future, Otherwise stay away completely.
Now, coming back to the Laxmi Organic IPO let us talk about in brief about the company and its financials and other details step by step.
About Laxmi Organic Industries Limited:
Laxmi Organic Industries Limited is a leading manufacturer of acetyl intermediates and specialty intermediates with almost three decades of experience in large-scale manufacturing of chemicals. Since their inception in 1989, the company has been on a journey of transformation.
The company is currently among the largest manufacturers of ethyl acetate in India with a market share of approximately 30% of the Indian ethyl acetate market. Further, post completion of the YCPL acquisition, the company’s market share in the ethyl acetate market will be further enhanced.
The company is the only manufacturer of diketene derivatives in India with a market share of approximately 55% of the Indian diketene derivatives market in terms of revenue in Fiscal 2020 and one of the largest portfolios of diketene products.
The company’s products are currently divided into two broad categories:
- Acetyl intermediates – Includes ethyl acetate, acetaldehyde, fuel-grade ethanol and other proprietary solvents
- Specialty intermediates – Includes ketene and diketene derivatives like esters, acetic anhydride, amides, arylides and other chemicals
The company’s products find application in various high-growth industries, including pharmaceuticals, agrochemicals, dyes and pigments, inks and coatings, paints, printing and packaging, flavours and fragrances, adhesives and other industrial applications.
Over the years, the company has significantly expanded its scale of operations and global footprint with customers in over 30 countries, including China, Netherlands, Russia, Singapore, United Arab Emirates, United Kingdom and United States of America.
The company has offices in Leiden (Netherlands), Shanghai (China) and Sharjah (United Arab Emirates), which enables it to assess international demand and increase customer outreach, thereby bolstering product development initiatives.
The company currently has two manufacturing facilities in Mahad, Maharashtra, with one facility dedicated to acetyl intermediates and another dedicated to specialty intermediates. It also has two distilleries located in Satara and Kolhapur districts in Maharashtra.
The company has two Department of Scientific and Industrial Research, Government of India recognized research and development facilities, with state-of-the-art research and development infrastructure to synthesise specialty molecules and advanced intermediates.
Financials Of Laxmi Organic Industries Limited:
For the six months ended September 30, 2020 and the Fiscals 2020, 2019 and 2018, the consolidated revenue from operations was ₹8,134.06 million, ₹15,341.23 million, ₹15,685.21 million and ₹13,930.74 million, respectively.
Whereas the consolidated EBITDA for the six months ended September 30, 2020 and the Fiscals 2020, 2019 and 2018 was ₹ 863.42 million, ₹ 1,437.09 million (inclusive of a one-time income of ₹ 256.63 million), ₹ 1,586.17 million and ₹ 1,544.09 million respectively,
while consolidated profit for the period from continuing operations for the six months ended September 30, 2020 and the Fiscals 2020, 2019 and 2018 was ₹454.84 million, ₹702.12 million, ₹723.91 million and ₹756.95 million respectively.
The total income of the company grew at a CAGR of 8.27%. The drop in income in 2020 was due to the fall in the prices of acetates and other chemicals during the pandemic. Profit after tax grew at a CAGR of 3.56%. Total assets grew at a CAGR of 18.55%
You can read the complete financials statement of Laxmi Organics here.
Laxmi Organic Peers Comparison:
The company generated an average five-year ROE and ROCE of 18.8% and 18.6%, respectively. Although the current ROE and ROCE stood at 16% and 16.1%, respectively. Whereas company’s operating cash flow has been positive in the last five years except for FY18.
As TTM numbers are not available, so based on March 2020 earnings, the stock would trade at a P/E of around 48.8, which is way higher than its peers’ median P/E of 39.1. The peers of the company namely Aarti Industries Ltd is at P/E of 24.92X and Fine Organics Industries Ltd is at 35.46X.
Based on equity post the IPO, the stock would trade at a P/B of around 4.4, which is lower than its peers’ median P/B of 7.5. Laxmi Organic has a slightly lower Debt to Equity Ratio as compared to its peers.
The long term prospects of the stock look promising with healthy demand from the end-user industry driving revenues for this company as fundamentals appear to be good. Looking at the valuation, the Laxmi Organic IPO is priced Undervalued.
Laxmi Organic IPO Details:
Objects of the Offer:
The company will not be receiving any of the proceeds from the offer for sale instead Laxmi Organic Industries has planned to utilize the net proceeds from the issue for setting up a manufacturing facility for fluoro specialty chemicals, working capital requirement, and for the purchase of plant and machinery for augmenting infrastructure development.
• QIB – 50% of the offer – ₹ 300 crores
• NIB – 15% of the offer – ₹ 90 crores
• RET – 35% of the offer – ₹ 210 crores
Promoters of Laxmi Organic Industries Limited IPO:
Yellow Stone Trust
Frequently Asked Question (FAQ):
1.What Is The Symbol For Laxmi Organic Industries Limited (LOIL)?
Ans: The Symbol for Laxmi Organic Industries Limited is LXCHEM
2.When Laxmi Organic IPO Coming?
Ans: The Issue Period for Laxmi Organic IPO is 15-Mar-2021 to 17-Mar-2021.
3. Post Modification Period For Laxmi Organic IPO?
Ans: The Post issue Modification Period for IPO is 18-Mar-2021 (10.00 A.M. to 11.00 A.M.).
4. What Is The Cut-off Time Period For UPI Mandate For Laxmi Organic IPO?
Ans: The Cut-off time for UPI Mandate Confirmation is 18-Mar-2021 (upto 12:00 PM).
5. What Is The Issue Type For Laxmi Organic IPO?
Ans: The Issue Type is 100% Book Building.
6.What Is The Price Band For Laxmi Organic IPO?
Ans: The Price (Band) Range for Laxmi Organic IPO is Rs.129 to Rs.130 per equity share.
7. What Is The Lot Size For Laxmi Organic IPO?
Ans: The Bid Lot i.e. Minimum Order Quantity (lot size) for Laxmi Organic IPO is of 115 Equity Shares and in multiples thereof 115 Equity Shares.
8. Who Are The Book Running Lead Managers For Laxmi Organic IPO?
Ans: The Book Running Lead Managers are, DAM Capital Advisors Limited (formerly known as IDFC Securities Limited) and Axis Capital Limited
9. What Is The Face Value For Laxmi Organic IPO?
Ans: The Face Value is of Rs. 2 whereas The Tick Size is of Rs.1
10. What Is The IPO Market Timings For Laxmi Organic IPO?
Ans: The IPO Market Timings is 10.00 a.m. to 5.00 p.m.
Apart from above points:
The Maximum Subscription Amount for Retail Investor is Rs. 2,00,000
The Maximum Bid Quantity for QIB Investors is 3,25,58,110 equity shares in multiple of 115 Equity Shares
The Maximum Bid Quantity for NIB Investors is 2,32,55,760 equity shares in multiple of 115 Equity Shares
The Name of the Registrar is Link Intime India Private Limited
The Contact person name number and Email id is Shanti Gopalkrishnan, +91 22 4918 6200, email@example.com
The Address of the Registrar is C101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai – 400 083, Maharashtra
Where To Check Laxmi Organic IPO Application And Allotment Status?
As an investor or trader generally we are curious and anxious to know the results of the application as soon as possible. To ease the anxiety, both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) have come up with dedicated pages and links which investors can use.
The NSE has an IPO bid verification module. It can be used to verify the IPO application details uploaded on the exchange bidding system by your member/bank. The data of the bid details uploaded by the member/bank would be available on T+1 day (where T would be date receipt of bid on NSE platform).
In addition, the data would be available until six days after the issue closure date. This gives the investor enough time to verify the data and instruct the member/bank to make any changes, if required.
Exchange will also provide allotment information as provided by the registrar to the issue.
An investor can avail this facility by registering using his/her PAN details. After registration, the investor will receive an email notification from NSE on the registered email address. That email will provide the login details.
The following link can be used for the same:
The BSE has also come up with a similar platform.
This unique facility allows investors to verify the status of their application submitted to a Trading Member or a SCSB (Self-Certified Schedule Banks).
The investor can check his application status/information on the website until one week after issue close.
The following link can be used by investors:
Important Things To Keep In Mind Before Applying For IPO’s:
- Try to fill for the same IPO online from different DP ID i.e. if in your family have more than 1 account you can possibly get the allocation done in case of over subscription.
- You should have a good knowledge of the sector and the company you are planning to invest.
- Analysis of the company’s balance sheet is very crucial. A clear understanding of the company’s future projects and vision is very necessary to know whether it will have a sustainable future.
- Investment decision has to be taken carefully and not in a hurry.
- Read as much as you can about the company, its objectives for launching the IPO, its past history in business and its futures prospectus.
- Don’t go for hype in the news, your analysis should be based on facts rather than gossips and rumors.
- Many IPOs are oversubscribed. What this means is that the demand for shares is much higher than the shares available for sale. In such a situation, it is no surprise that many investors fail to get any shares allotted to them. This is why it is advisable to apply for IPO shares on the last day of bidding. This way, one can have a good estimate on how large the subscription will be. Also, in that case, one should bid for just one lot and not unnecessarily lock up their capital.
The global chemicals market is valued at around USD 4,738 Bn with China accounting for major market share (37%) in the segment followed by European Union (17%) and United States (14%).
India accounts for ~3.5% market share in the global chemicals market. Going forward the APAC is anticipated to grow at the fastest rate of 7-8% during the forecast period (2019-24F).
The Indian chemicals market is valued at USD 166 Bn (~4% share in the global chemical industry) with the commodity chemicals accounting for almost 46%. It is expected to reach ~USD 280-300 Bn in the next 5 years, with an anticipated growth of 12% CAGR.
The specialty chemical industry forms 47% of the domestic chemical market, which is expected to grow at a CAGR of around 11-12% over the same period.
Let us now look at some of the strength and risk factors of Laxmi Organics India Limited.
Some of the qualitative factors and strengths of
- Laxmi organic has been one of the largest exporters of ethyl acetate to Europe from India since 2012.
- The company has a diversified customer base across high-growth industries with marquee clients such as Alembic Pharma, Dr. Reddy’s Lab, Laurus Labs and UPL Ltd., to name a few.
- Currently, the company has two strategically located manufacturing facilities with close proximity to several ports in Maharashtra.
- In addition to India, the company has a high global presence, exporting its products to over 30 countries. Its exports constituted more than 22 per cent of its revenues as of September 30, 2020.
Some of the Risk Factor for
- Though the company’s manufacturing facilities are strategically located, they fall under one geographical area. Thus, any social or political unrest could impact its operations.
- The CBI and ED have initiated criminal proceedings against one of the directors of the company. Also, the promoter has been booked under the Factories Act, for a criminal proceeding.
- The company is vulnerable to industrial hazards and regulatory scrutiny since it deals with critical chemicals.
- The company has a high dependence on some of its suppliers. Its top 10 suppliers accounted for more than 78 per cent of its total expenditure as of September 30, 2020.
Therefore, it is always advisable to go through Laxmi Organic IPO – RHP to know in detail about the company.
The only thing which should be bothering you is the research you did before applying for the IPO. Investing in IPO is risky as well as profitable. Having said that you also need to keep in mind important things mentioned above before applying to IPO’s as the risk is always involved.
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Note: Please do your own research and make investment. Moneycontain will not be responsible for any of your losses at all. The point made is for educational purpose only and intended to give information. All investments are subject to risks, which should be considered prior to making any investments. The above details are compiled from information available on public platforms. These are not buy or sell recommendations.