Chemplast Sanmar, the Hyderabad-based specialty chemicals player, made its stock market debut in August 2021 following a successful but unremarkable IPO. Nevertheless, the scrip has now witnessed a reversal in fortunes following brokerage house coverage initiations and a ratings upgrade.
Chemplast Sanmar news following the IPO has been good but it wasn’t the same at the time of the public offer. The offer was met with skepticism due to the fact that it had delisted in 2012 at INR15 per share and now the IPO at much higher levels was seen in a negative light.
Given the confusion, it was no wonder that the offer commanded no premium in grey market and it had a direct bearing on subscription figures. The offer remained undersubscribed for first two days and even on third day, its overall subscription stood at just 2.17 times. It also didn’t help that very few brokers came with their recommendations and most of them, including ICICI, had neutral view. By the time it got listed, grey premium had actually vanished. The stock also made a forgettable debut, ending the first day with a minor loss of nearly 1%.
As we highlighted in our review of Chemplast Sanmar IPO, a lot has changed in the company and industry over the last decade when the company was delisted.
Chemplast Sanmar news flow: Turning positive one at a time
Following the lackluster IPO, Chemplast Sanmar news has been largely positive and this includes receiving a ratings upgrade from CRISIL, reducing its debt to negligible levels. It also remains on track to expand production at Cuddalore facility by de‐bottlenecking by the end of FY22. The company recently shared this update for the latest six months.
Now, ICICI Securities see strong upside in the manufacturer of PVC resins and has initiated coverage with a target price of INR910 per share. The brokerage house sees PVC market undergoing structural changes with tightening supplies, eventually favoring PVC manufacturers and material suppliers.
In line with the changing fortunes of specialty chemical sector, it is very probable that Chemplast Sanmar news flow turns more positive in the coming days. As a result, investors are flocking to the stock which is up 37.5% over the last month. Keep watching this space, more news on Chemplast Sanmar are expected.