It is surely raining IPOs for investors who have yet another opportunity in the form of Laxmi Organic Industries. The offer is priced in the range of INR129 – 130 per share and 35% of the shares will be reserved for small investors. A total sum of INR600 crore will be mobilized by the offer. Meanwhile, Laxmi Organic IPO GMP has started on a strong footing.
Laxmi Organic IPO details
| Subscription Dates | 15 – 17 March 2021 |
| Price Band | INR129 – 130 per share |
| Fresh issue | INR300 crore |
| Offer For Sale | INR300 crore |
| Total IPO size | INR600 crore |
| Minimum bid (lot size) | 115 shares |
| Face Value | INR2 per share |
| Retail Allocation | 35% |
| Listing On | NSE, BSE |
The offer price translates into a P/E ratio range of 45.10 – 45.45, based on FY2020 EPS. This may appear on the higher side but the market appears to like its decent margin and return ratios. In FY2020, its Return on Net Worth (RONW) stood at 16.45% while net profit margin was also at a robust 5.6% despite Covid-19 disruptions. Grey premium activity started at over 100% of offer price and even though it has come down lately, the rates are still near 50%, indicating bright prospects of listing gains.
Laxmi Organic IPO GMP (Grey Market Premium) rates
| Date | GMP (in INR) | Kostak (in INR) | Subject to Sauda (in INR) |
| 22 Mar 2021 | 60 | 300 | 6,000 |
| 20 Mar 2021 | 70 | 350 | 6,000 |
| 19 Mar 2021 | 90 | 400 | 6,000 |
| 18 Mar 2021 | 110 | 450 | 6,500 |
| 17 Mar 2021 | 90 | 400 | 6,000 |
| 16 Mar 2021 | 110 | 450 | 6,500 |
| 15 Mar 2021 | 130 | 450 | 6,500 |
| 13 Mar 2021 | 90 | 400 | 6,000 |
| 12 Mar 2021 | 90 | 400 | 6,000 |
| 11 Mar 2021 | 80 | 350 | 5,500 |
| 10 Mar 2021 | 110 | 400 | 6,500 |
| 9 Mar 2021 | 130 | 400 | 7,000 |
| 8 Mar 2021 | 150 | 450 |
Investors are likely to take stock of the several positive factors including customers in over 30 countries, 23% revenue contribution by exports, and presence of several customers such as Syngenta, Alembic Pharmaceuticals, Dr. Reddy’s Laboratories, Granules India, Huhtamaki India, Laurus Labs, Mylan Laboratories, Neuland Laboratories, and Suven Pharmaceuticals.
Laxmi Organic’s financial performance (in INR crore)
| FY2018 | FY2019 | FY2020 | H1 FY2021 | |
| Revenue | 1,396.1 | 1,574.3 | 1,538.6 | 814.4 |
| Expenses | 1,282.8 | 1,476.3 | 1,483.5 | 758.2 |
| Net income | 76.0 | 72.3 | 69.7 | 45.6 |
| Net margin (%) | 5.4 | 4.6 | 4.5 | 5.6 |
