HP Adhesives freezes at 5% upper circuit for sixth day after strong debut

With today's gain, the stock has advanced 64 per cent higher over the issue price on the BSE.

Shares of HP Adhesives were locked in the upper circuit for the sixth straight day, up 5 per cent at Rs 448.70, the stock's new high on the BSE on Tuesday.

The adhesives and sealants company had made a strong market debut last week. The stock had closed at a 22 per cent premium over its issue price of Rs 274 on the debut day.

With today’s gain, it has advanced 64 per cent higher over the issue price on the BSE. Till 01:41 pm; a combined 424,000 equity shares had changed hands and there were pending orders for around 42,000 shares on the NSE and BSE.

The trading in the equity shares of HP Adhesives shall be transferred from trade for trade segment (T Group) to Rolling segment with effect from January 10, 2022. Accordingly, the dealings in the equity shares of the company will be shifted under B Group.

Since listing, HP Adhesives is trading under the T group on the BSE. In the T2T segment, each trade has to result in delivery and no intra-day netting of positions is allowed.

HP Adhesives is engaged in manufacturing and distribution of adhesives and sealants alongwith other ancillary products. There is a potential for the company to grow exponentially in the upcoming years, and the Capex will guide growth.

In FY21, the market of the consumer adhesives industry was valued at Rs 53-55 billion and it de-grew by 1-2 per cent due to the pandemic-led reduced construction activity. However, it is expected to recover strongly in H2FY22 driven by a pickup in infrastructure and construction activity, and rising demand from end-user industries such as packaging, electronics and woodworking.

India’s consumer adhesives industry is expected to clock 9-10 per cent CAGR between fiscals 2021 and 2026 driven by economic recovery and growth in end-user industries. In particular, demand is expected to recover in fiscal 2022, growing at 14-15 per cent on-year, on a low base of fiscal 2021, as the Indian economy recovers from the impact of the pandemic. Overall, growth of the consumer adhesives industry is expected to moderate and log a CAGR of 8 per cent between fiscals 2022 and 2026, according to the draft red herring prospectus filed by the company.

CRISIL Research expects PVC adhesives market to grow at a 9-11 per cent CAGR between fiscals 2021 and 2026, due to increasing demand from the plastic pipes market. The market is expected to recover in fiscal 2022, growing at 16-17 per cent on-year, due to an economic recovery after the Covid-19 and the consequent rise in construction activity, which will lead to demand increase for pipes and fittings.