Unilex Colours and Chemicals IPO Lists at ₹89 Above Issue Price

Unilex Colours and Chemicals Limited, a manufacturer of pigments and trader of chemicals and food colors, made a muted debut on the Indian stock market on Thursday, 3rd October 2024, with its shares listing at a slight premium to the issue price on the National Stock Exchange (NSE) SME platform.

Listing Details

• Listing Price: Unilex Colours and Chemicals shares were listed at ₹89 per share on the NSE SME platform, marking a modest start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price represents a small premium over the IPO issue price. Unilex Colours and Chemicals had set its IPO price band from ₹82 to ₹87 per share, with the final issue price being fixed at the upper end of ₹87.
• Percentage Change: The listing price of ₹89 on the NSE SME translates to a premium of 2.3% over the issue price of ₹87.

First-Day Trading Performance

• Opening vs. Latest Price: Following its modest opening, Unilex Colours and Chemicals' share price experienced some volatility. By 10:19 AM, the stock was trading at ₹87.40, down 1.8% from its opening price and just 0.46% above the issue price.
• Market Capitalisation: As of 10:19 AM, the company's market capitalisation stood at ₹118.47 crore.
• Trading Volume: The traded volume was 9.52 lakh shares with a traded value of ₹8.37 crore, indicating moderate investor interest on the first day of listing.

Market Sentiment and Analysis

• Market Reaction: The market reacted cautiously to Unilex Colours and Chemicals' listing. The modest listing premium and subsequent price movement suggest a balanced view of the company's prospects.
• Subscription Rate: The IPO was oversubscribed by 35.03 times, with NIIs leading at 60.74 times, followed by retail investors at 35.11 times, and QIBs at 15.58 times.
• Price Band: The stock hit a high of ₹89 and a low of ₹84.55 during early trading, reflecting some volatility.

Growth Drivers and Challenges

Expected drivers of future performance:

• Diverse product portfolio with over 100 products
• Established presence in both domestic and international markets
• ISO 9001:2015 certified manufacturing facility
• Strong brand recognition under the "Unilex" name

Potential challenges:

• Highly competitive and fragmented pigment and chemical sector
• Potential volatility in raw material prices
• Inconsistent top-line growth in recent years

Utilisation of IPO Proceeds

Unilex Colours and Chemicals plans to use the funds for:

• Meeting working capital requirements
• Repayment of a portion of certain borrowings
• General corporate purposes

Financial Performance

The company has demonstrated moderate financial growth:

• Revenue increased by 3% to ₹14,932.88 lakh in FY2024 from ₹14,441.84 lakh in FY2023
• Profit After Tax (PAT) rose by 24% to ₹616.67 lakh in FY2024 from ₹497.07 lakh in FY2023

As Unilex Colours and Chemicals begins its journey as a listed entity, market participants will closely monitor its ability to leverage its diverse product portfolio and international presence to drive future growth and improve shareholder value. The muted listing and subsequent price movement suggest cautious market sentiment towards the company's prospects in the competitive pigment and chemical manufacturing sector.