Sigachi Industries IPO ends with robust subscription
Published on Nov 04, 2021 17:13
The initial public offer (IPO) of Sigachi Industries received bids for 54,89,47,440 shares as against 53,86,500 shares on offer. The issue was subscribed 101.91 times.
The portion set aside for non-institutional investors was subscribed 172.43 times. The qualified institutional buyers` portion was subscribed 86.51 times. The retail individual investors category was subscribed 80.49 times.
The issue opened for bidding on 1 November 2021 and it closed on 3 November 2021. The price band of the IPO was fixed at Rs 161-163 per share.
The offer comprised fresh issue of 76,95,000 equity shares aggregating up to Rs 125.43 crore at upper price band of Rs 163 and Rs 123.89 crore at lower price band of Rs 161.
Ahead of the IPO, Sigachi Industries on 29 October 2021 finalized allocation of 23,08,500 equity shares to anchor investors at an allocation price of Rs 163 per share, aggregating to Rs 37,62,85,500.
The company proposes to utilize the net proceeds from the issue towards funding capital expenditure for expansion of production capacity for microcrystalline cellulose at Dahej (Gujarat) amounting to Rs 28.16 crore, for the expansion of production capacity for microcrystalline cellulose at Jhagadia (Gujarat) worth Rs 29.24 crore, to manufacture Croscarmellose Sodium, a modified cellulose used as excipient at Kurnool, Andhra Pradesh amounting Rs 32.30 crore and balance for general corporate purposes.
Sigachi Industries, incorporated in 1989, started its journey manufacturing chlorinated paraffin and hydrochloric acid in its manufacturing unit situated at Hyderabad. The company diversified its product portfolio in 1990 to manufacture microcrystalline cellulose (MCC). MCC is widely used as an excipient for finished dosages in the pharmaceutical industry. The inert non-reactive, free flowing and versatile nature of MCC has varied applications in the pharmaceutical, food, nutraceuticals, and the cosmetic industries.
The company manufactures MCC of various grades ranging from 15 microns to 250 microns. The major grades of MCC manufactured and marketed by the company are branded as HiCel and AceCel. These products are distinguished with the help of different drying techniques employed by the company during the manufacturing process. HiCel is a spray dried product and is considered premium in quality due to the physical properties of the product such as particle size, density, flow, tableting properties, etc. AceCel on the other hand is manufactured through bulk drying process. It also manufactures various grades of this product in combination with various chemicals like colloidal silicon dioxide, carboxy cellulose sodium, mannitol etc. to cater to the growing market of the co-processed excipients.
The company reported a consolidated net profit of Rs 8.99 crore and total income of Rs 54.95 crore as on 30 June 2021.
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