After debuting on Dalal Street with a 10 per cent listing pop, shares of Aether Industries rallied more to hit the upper circuit limit on Friday.
On BSE, the speciality chemical firm got listed at a premium of 10 per cent at Rs 706.15 compared to the issue price of Rs 642, while it debuted at Rs 704, a similar premium on National Stock Exchange (NSE).
The stock saw heavy demand from investors, zooming another 10 per cent to Rs 776.75, taking the entire gains to 21 per cent over the issue price. On NSE too, it hit the upper circuit.
Analysts have a mixed view on the counter as a few consider Aether a long term play, whereas others are recommending investors to book profits.
Santosh Meena, Head of Research,
believes that the company deserves the premium valuations due to its phenomenal growth prospects.
“Those who applied for listing gains can maintain a stop loss of Rs 675. Meanwhile, new investors can buy for the long-term and existing investors can continue to stay invested.”
On the other hand, Astha Jain, Senior Research Analyst, Hem Securities suggested investors to book partial profits and hold the remaining portion for the long run.
Aether Industries raised Rs 808.04 crore through its primary offering. The issue ran between May 24-26 and the company sold its shares in the range of Rs 610-642 apiece with a lot size of 23 shares.
Saurabh Joshi Research Analyst, Marwadi Financial Service recommended investors to book profit after robust listing gains as the declining cash flow to EBITDA ratio of the company makes him cautious about the stock from a long-term perspective.
“High-profit growth with low free float is driving the stock price higher. The operating profit conversion to cash is not favourable for long-term investment,” he added.
The issue received a solid response from investors with an overall subscription of more than 6.26 times, thanks to solid bidding from institutional buyers whose portion was subscribed 17.6 times.
HNI and retailers’ portions were subscribed 2.52 and 1.14 times, respectively, whereas the employee quota was subscribed 1.06 times during the bidding process.
Rajnath Yadav, Research Analyst, Choice Broking said the issue was highly-priced and all the positives have been factored in demanded valuations.
“Despite witnessing positive sentiments in the equity market in the last couple of trading sessions, we are recommending investors to take an exit post listing,” he advised.
Incorporated in 2013, Aether Industries is a manufacturer of specialty chemicals and sole play in some of the categories. The company is the largest manufacturer of 4MEP, T2E, NODG and HEEP products in the world by volume.
Aether Industries has two manufacturing sites at Sachin in Surat, Gujarat. Its product portfolio comprises over 25 products sold to over 34 global companies in 18 countries and to over 154 domestic companies as of March 31, 2022.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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