Advanced Enzyme public offering subscribed 115 times

The initial public offering (IPO) of equity from Advanced Enzyme Technologies received an overwhelming response, with the issue seeing 115 times more demand than the shares on offer. The 3.2-million share offering received 373 mn bids, according to stock exchange data.

The qualified institutional buyers category was subscribed 94 times, the retail (small investor) portion was subscribed a little over 10 times and the high net worth (wealthy) individual segment saw a whopping 393 times subscription.

The response to the Rs 412-crore IPO is among the highest for IPOs this year. Their price band was Rs 880-896 a share. Most brokerages had asked clients to subscribe to the IPO and even the grey market premium suggested the stock would soar at least 25 per cent on listing day.

“We believe that supported by strong entry barriers, high level of customer stickiness, strong margins, healthy return ratios and high process and knowledge-dependency, it should enjoy a valuation premium over other specialty chemical companies,” Emkay Global had said, noting it was valued at a discount to its peers.

The company had raised Rs 123 crore from anchor investors. Around Rs 362 crore of the issue was an Offer for Sale from existing investors, while Rs 50 crore was an issue of new shares. The IPO was handled by ICICI Securities and Axis Capital.

Advanced Enzyme gets two-third of revenue from its international operations (55 per cent from America). Through the IPO, it is also looking at the inorganic route to enter new product areas, enhance research expertise and grow its market share.

The company is engaged in research & development, manufacturing and marketing of 400-plus proprietary products, developed from 60 indigenous enzymes.