Laxmi Organic surges 13% as FPIs buy stake via open market

Shares of Laxmi Organic Industries surged 13 per cent to Rs 185.40 on the National Stock Exchange (NSE) in intra-day trade on Friday after foreign portfolio investors (FPIs) bought over three million equity shares worth about Rs 50 crore of the company via the open market.

On Thursday, March 26, Goldman Sachs India Fund Limited (1.67 million) and Plutus Wealth Management LLP (1.5 million) purchased a combined 3.17 million equity shares of Laxmi Organic Industries for Rs 49 crore. The FPIs purchased these shares at an average price of Rs 155.60 per share on the NSE, the bulk deal data shows. The names of the sellers were not ascertained immediately.

With today’s gain, the stock of the speciality chemicals company has rallied 43 per cent over its issue price of Rs 130 per share. Shares of Laxmi Organic Industries made a healthy debut on the bourses yesterday and closed at Rs 164.05, a 26 per cent premium over its issue price on the NSE.

The initial public offer (IPO) of Laxmi Organic Industries had received a robust response from the investors. The issue was subscribed 107 times, led by institutional and high net worth investors. The non-institutional investors’ portion was subscribed nearly 218 times, qualified institutional buyers (QIBs) quota 175 times and retail investors' portion 20 times, the data shows.

Laxmi Organic Industries is a leading manufacturer of acetyl intermediates and speciality intermediates. Its products are currently divided into two broad categories viz. acetyl intermediates and speciality intermediates. Acetyl intermediates include ethyl acetate, acetaldehyde, fuel-grade ethanol and other proprietary solvents while speciality intermediates comprise ketene, diketene derivatives viz. esters, acetic anhydride, amides, arylides and other chemicals.

The proceeds from the fresh issue will be used for investment in a wholly-owned subsidiary, Yellowstone Fine Chemicals Private Limited (YFCPL), for part-financing its capital expenditure requirements, funding capital expenditure requirements for expansion of the company’s SI Manufacturing, and funding working capital requirements of the company.

At 09:37 am, the stock was trading 11 per cent higher at Rs 183 on the NSE as compared to a 0.82 per cent rise in the Nifty50 index. A combined 8.97 million equity shares have changed hands on the counter on the NSE and BSE so far.