Monday, May 9, 2011

Galaxy Surfactants IPO

Galaxy Surfactants, a specialty chemicals maker has come out with an IPO of Rs 202 crore by offering 5.93 million shares. The company is one of the leading manufacturers and marketers of surfactants and specialty chemicals in India for the personal and home care industry. It produces a range of vital cosmetic ingredients including active ingredients, UV protection and functional products. The company has a portfolio of 66 products with sales across 70 countries, has 18 patents in India and 10 in the U.S. It has applied for 12 more patents in India and 1 in Europe.

The IPO opens on May 13 and closes on May 19, 2011. The company has set a price band of Rs 325-340 a share.

The proceeds from the IPO will be used to part-finance expansion of its subsidiary GC Egypt, to set up new manufacturing unit in Gujarat and to expand its existing capacities.

For the year-ended March 2010, it recorded a net profit of Rs 378.8 million on total income of Rs 6.5 billion.

Motilal Oswal Investment Advisors and Centrum Capital are the book running lead managers for the issue.

Recommendation:
CRISIL has assigned Grade 4 to the IPO indicating above average fundamentals. We would recommend investors to invest in this IPO with a long term view.

Subscription:
Galaxy Surfactants IPO opened for subscription and has got muted response from investors till now.

At the close of the day,
QII segment got subscribed by 0.59 times
NII segment got susbcribed by 0.04 times
Retail segment got subscribed by 0.11 times

Galaxy Surfactants IPO has been withdrawn due to poor response from investors! The IPO received very poor response garnering only 30% subscription (NSE data) while a minimum of 90% subscription is required for listing on the bourses.