SH Kelkar soars 17 Per Cent on Listing
Shares of fragrance and flavours manufacturer SH Kelkar and Co. Ltd on Monday opened 23.33% above the issue price of Rs.180, following a successful initial public offering (IPO), which saw a subscription of 27 times.
SH Kelkar’s shares closed at Rs.207.30, paring some of the early gains, but the stock was still up by 15% from its issue price. It had earlier touched a high of Rs.222.70. The benchmark Sensex on Monday rose 0.58% to close at 25,760.10 points.
SH Kelkar, backed by the global private equity (PE) firm The Blackstone Group LP, launched its IPO 28 October to raise Rs.508 crore, pricing the shares at Rs.173-180. The institutional investors’ category was subscribed 25.5 times, while wealthy individuals’ and retail investors’ categories were subscribed 87.3 and two times, respectively, according to National Stock Exchange data.
Blackstone, which invested in the firm in 2012 and held 33.28% stake, sold almost 10% of its stake through the IPO.
SH Kelkar raised Rs.210 crore through the issue of fresh shares, most of which will be used to reduce its debt of Rs.170 crore.
It will use the rest for investment in its subsidiary. The promoters sold a small part of their stake in the IPO.
The firm, founded in 1922, has four factories, three of which are located in India (Mumbai, Vapi and Raigad) and one in the Netherlands, with total installed manufacturing capacity of more than 19,819 tonnes a year.
SH Kelkar’s fragrance products and ingredients are used as raw material in soap, fabric care, skin and hair oils, perfume and household products. Its flavours are used in baked goods, dairy products, beverages and pharmaceutical products. It exports fragrances to 52 countries and flavours to almost 15 countries.
In 2014-15,SH Kelkar reported a revenue of Rs.837 crore against Rs.761.3 crore in the previous year. The firm’s revenue has grown at a compounded annual rate of 16% over last four fiscal years.
JM Financial Institutional Securities Ltd and Kotak Mahindra Capital Co. Ltd managed the issue for SH Kelkar.
Last week, InterGlobe Aviation Ltd, which owns India’s largest and most profitable airline IndiGo,listed on stock exchanges at Rs.855.9 per share—a gain of more than 11.8% from its issue price of Rs.765.
So far this year, 18 companies have raised almost Rs.11,000 crore through IPOs. Out of these, 10 firms other than SH Kelkar are trading above their IPO price.
Firms that have gained the most since their listing include VRL Logistics Ltd, whose stock has risen by 105% from its issue price of Rs.20, as on 16 November, and Syngene International Ltd, which gained 45.2% from its issue price of Rs.250.
The firms that have seen their stock price decline the most include Adlabs Entertainment Ltd, whose stock has fallen 41.44%, and MEP Infrastructure Developers Ltd, which is down by 18.65%.