Wednesday, January 19, 2011

Omkar Speciality Chemicals IPO - Analysis, Recommendation, Review

Omkar Speciality Chemicals is entering capital market with an IPO offering of 81 lakh equity shares of Rs 10 each. The issue constitutes 41.27% of the fully diluted post issue paid-up capital of the company. The company plans to raise Rs 76.95-79.38 crore through issue. The company is mainly engaged in the manufacture and sale of speciality chemicals like selenium compounds, iodine compounds, molybdenum compounds and pharma intermediates like Potassium Iodate, Bismuth Ammonium Citrate, Bromoform etc.

The IPO opens on January 24 and will close on January 27, 2010. The company has fixed price band at Rs 95-98 per equity share for the issue. Bids can be made for minimum 60 equity shares and in multiples of 60 equity shares therafter. The maximum subscription for retail investor is Rs 2 Lacs.

Omkar Speciality Chemicals intends to utilize the IPO proceeds for setting up of new manufacturing facility at Unit 4 at Badlapur, Maharashtra, with cost of Rs 32.16 crore; expansion of existing manufacturing facilities at Unit 1, Unit 2 & Unit 3 at Badlapur, Maharashtra, with Rs 14.62 crore; and working capital requirements of Rs 10 crore.

For the period of six months ended on September 30, 2010, it has reported net profit of Rs 5.05 crore on total income of Rs 51.56 crore.

Almondz Global Securities Ltd is the book running lead manager to the issue and Bigshare Services Private Limited is the registrar.

Recommendation:
CARE has assigned Grade 3 to the IPO. Bookmark this post for our recommendaton!

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