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Prasol Chemicals IPO Opens With Mixed Valuation Views
Prasol Chemicals is selling shares to the public through an IPO.
The IPO is open from 8 September to 10 September.
Each share costs between ₹643 and ₹676, and buyers must purchase at least 22 shares.
The company plans to use some new money to repay debt and support its business.
It makes more than 150 specialty chemicals and sells them to customers in many countries.
Some brokers believe the company can grow because it has specialized products and strong barriers to competition.
Other analysts think the shares are already expensive and leave little room for mistakes.
The grey market price suggests the shares could list about 8% above the highest IPO price, but this is not guaranteed.
Prasol Chemicals’ ₹500 crore IPO opened on 8 September and will close on 10 September, with a price band of ₹643–₹676 per share.
The issue includes a fresh issue of up to ₹80 crore and an offer for sale of up to ₹420 crore; one lot contains 22 shares.
The company raised nearly ₹150 crore from anchor investors by allocating 22.19 lakh shares at ₹676 each.
The IPO had a grey market premium of ₹55 per share, indicating a potential listing gain of nearly 8% over the upper price band.
SBI Securities, Anand Rathi, Master Capital Services and Ventura supported a long-term subscription, while Swastika Investmart advised investors to consider the stock after listing.
- Who
- Prasol Chemicals, its existing shareholders, anchor investors and participating public-market investors.
- What
- Prasol Chemicals launched a ₹500 crore initial public offering comprising a fresh issue and an offer for sale.
- Where
- Prasol Chemicals is based in Thane, India, and operates manufacturing facilities including a proposed expansion at Saykha, Gujarat.
- When
- The IPO opened on Tuesday, 8 September, and is scheduled to close on 10 September; anchor shares were allocated the preceding day.
- Why
- The company is raising capital to repay borrowings, meet working-capital needs and fund general corporate purposes, while existing shareholders are selling shares through the offer for sale.
Long-Term Subscription Case
Valuation Caution
Growth and competitive strengths
Long-Term Subscription Case
Supporters point to more than 150 specialty chemicals, R&D-led innovation, a diversified customer base, high entry barriers and revenue, EBITDA and adjusted PAT CAGRs of 18.6%, 51.7% and 97.8% respectively from FY24 to FY26.
Valuation Caution
Cautious analysts acknowledge the company’s product depth but argue that its valuation leaves limited room for execution or financial-performance disappointments.
IPO valuation
Long-Term Subscription Case
SBI Securities said the issue appears reasonably valued relative to peers and highlighted the company’s relatively better return ratios; Anand Rathi also assigned a subscribe-for-long-term rating despite calling it fully priced.
Valuation Caution
Swastika Investmart said the 45–47 times P/E valuation was fair-to-full and recommended considering the stock after listing, once performance stabilizes and valuation becomes more reasonable.
Operational risks
Long-Term Subscription Case
The proposed Saykha expansion, potential recovery at the Mahad unit and debt repayment could support future growth and strengthen the investment case.
Valuation Caution
The business depends on manufacturing facilities, where unplanned shutdowns can disrupt operations; the issue is valued at about 48 times earnings based on post-issue capital.
Key facts
- Issue size
- ₹500 crore
- Price band
- ₹643–₹676 per share
- Lot size
- 22 shares; minimum retail investment of ₹14,872 at the upper band
- Issue structure
- Fresh issue of up to ₹80 crore and offer for sale of up to ₹420 crore
- Anchor allocation
- 22.19 lakh shares at ₹676 each, worth nearly ₹150 crore
- Grey market premium
- ₹55 per share, implying a potential gain of nearly 8% over the upper band
- Lead manager and registrar
- DAM Capital Advisors and Kfin Technologies, respectively
- Reported FY26 performance
- Revenue of ₹1,237.85 crore and net profit of ₹83.12 crore
Quotes
Swastika Investmart
Brokerage providing an assessment of Prasol Chemicals’ IPO valuation and investment outlook
“Their business is dependent on manufacturing facilities wherein unplanned shutdown happens creating disruption in operational activities. Overall strong product depth, R&D-led innovation and a diversified global customer base position the company well to capture long-term growth opportunities. Hence, we assign a Subscribe for Long Term rating for the issue.”
livemint.com
“Prasol is seeking a P/E of 48 times, making the issue appears to be fully priced. Overall strong product depth, R&D-led innovation and a diversified global customer base position the company well to capture long-term growth opportunities in specialty chemicals. Hence, we assign a subscribe for long term rating for the issue,”
businesstoday.in
Sources
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