HP Adhesives Limited’s initial public offer (IPO) was subscribed 8.03 times on the second day of its issue, according to subscription data on the stock exchanges. The IPO of the adhesives and sealants company opened on December 15, and will close on Friday, December 17 – remaining open for investors for a period of three days.
On Thursday, the portion reserved for retail individual investors was subscribed 40.29 times – the highest among the three groups of investors. The portion set aside for non-institutional investors was subscribed 1.90 times, while the portion reserved for qualified institutional buyers or QIB was subscribed 0.34 times today.
Out of the net issue, 75 per cent is reserved for qualified institutional buyers, 15 per cent for non-institutional bidders, and 10 per cent for retail investors. The company is offering up to 45,97,200 equity shares in the price band of Rs 262-274 per equity share.
HP Adhesives Limited manufactures a wide range of consumer adhesives and sealants such as PVC, cPVC, and uPVC solvent cement, synthetic rubber adhesive, PVA adhesives, silicone sealant, acrylic sealant, gasket shellac, other sealants, and PVC pipe lubricants.
These adhesives and products have applications in multiple industries such as plumbing and sanitary, drainage and water distribution, woodwork, footwear, automotive, foam-furnishing, among others.
”At the higher end of the price band, HP Adhesives IPO is priced at a PE ratio of ~50 times FY21 EPS (on a fully diluted basis). This is lower than listed peer Pidilite Industries (90 times). However, given better brand recall and leadership status, Pidilite is expected to command a higher valuation.
Given the company’s strong product profile, healthy rise in topline, strong market share, improving financial profile, and strong runway for growth, we remain “Positive” on the long-term prospects of the issue,” SEBI-registered investment advisor INDmoney said in a report.