HP Adhesives makes strong market debut; closes with 22% gains

The shares of HP Adhesives made a strong debut on the bourses on Monday. The stock got listed at Rs 319 — a 16.4 per cent premium to its issue price. The stock gained further and ended Monday’s session at Rs 334.95 — a 22.24 per cent premium to its issue price. After listing, the company has a market capitalisation of Rs 615.47 crore.

The initial public offering (IPO) of HP Adhesives was subscribed 21x. The institutional portion was subscribed 1.8x, wealthy investor portion 19x, and retail investor portion 81x.

The company had priced its IPO between Rs 262 and Rs 274 per share. The Rs 126-crore IPO comprised a fresh issue of Rs 113.4 crore and an offer for sale of Rs 12.5 crore.

The company plans to use the fresh issue proceeds to fund its working capital requirements and finance the expansion of its manufacturing facility at Raigad district in Maharashtra. The company manufactures consumer adhesives and sealants, such as polyvinyl chloride (PVC), synthetic rubber adhesive, and PVC pipe lubricants.

The company also manufactures these products for select large PVC pipe manufacturing companies under co-branding or private label on order basis.

The company also sells ancillary products like ball valves, thread seal, and other tapes through its distribution network.

As of September 30, the company’s distribution network comprises four depots in Delhi, Kolkata, Bengaluru, and Indore and more than 750 distributors who cater to more than 50,000 dealers in India. In 2020-21, the company sold its products in 21 countries. Unistone Capital was the banker to the issue.