Devson Catalyst’s SME IPO saw strong demand, reaching over 14.5 times subscription by mid-day on its second day. Retail investors led the interest, bidding for 22 times their available quota. The specialty chemical maker aims to raise Rs 42.34 crore to fund a new manufacturing facility and general business needs, with shares expected to list on the BSE SME platform on July 16.
The initial public offering (IPO) of specialty chemical manufacturer Devson Catalyst has witnessed strong investor interest, with the total subscription reaching 14.55 times by mid-day on July 10, the second day of the bidding process. The issue, which opened for subscription on July 9, has seen bids for 3.76 crore shares against the 25.87 lakh shares on offer.
Retail investors have shown the highest level of enthusiasm, subscribing over 22 times their reserved quota. Meanwhile, the non-institutional investor category has seen a booking of approximately 15 times, and qualified institutional buyers have subscribed 1.72 times their allocated portion. The IPO is scheduled to remain open until July 13, and the company has fixed a price band between Rs 112 and Rs 118 per share.
Usage of IPO Proceeds and Business Plans
The company intends to raise Rs 42.34 crore through this offering, which consists of a fresh issue of shares worth Rs 39.39 crore and an offer for sale by existing shareholders valued at Rs 2.95 crore. A significant portion of the capital raised from the fresh issue is designated for capital spending on a new manufacturing facility. The remainder of the proceeds is allocated toward meeting working capital requirements and general corporate purposes.
For retail investors, the minimum investment requirement is set at Rs 1.41 lakh, as the lot size for the IPO is fixed at 1,200 shares. The company has reserved 50% of the issue for qualified institutional buyers, 35% for retail investors, and 15% for non-institutional investors, with a small portion also set aside for employees and market makers.
Market Context and Future Timeline
As of July 10, the stock was seeing interest in the unofficial grey market, with a premium of approximately Rs 45 per share. This indicates that investors are anticipating a potential listing gain of over 38% relative to the upper price band. It is important for investors to note that grey market premiums are unofficial estimates and do not guarantee future stock performance or actual listing prices.
The final basis of allotment for the shares is expected to be determined on July 14. Successful bidders will see the shares credited to their accounts, followed by the company's debut on the BSE SME platform on July 16. The key monitorable for investors post-listing will be the company’s ability to execute its expansion plans and achieve the projected production capacity at its new facility without significant cost overruns.