Fine Organic Industries Limited
This post on Fine Organic Industries IPO tries to bring out consolidated brokerage views , Grey Market Premium, Subscription information. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Fine Organic Industries IPO or not.

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Fine Organic Industries IPO: Grey Market Premium etc.

12/03/18 Grey Market Premium Rs.  18/- , Kostak Nil

Fine Organic Industries IPO: Anchor Investors

Fine Organic Industries raised Rs 180 crore from anchor investors. The company has allotted 22,99,497 equity shares to 15 anchor investors at Rs 783 per scrip, garnering Rs 180.05 crore, Among the anchor investors are Goldman Sachs India, HDFC Small Cap Fund, SBI Magnum Comma Fund, DSP BlackRock Equity & Bond Fund and IDFC Equity Opportunities Fund – Series 5  etc

Complete Anchor List Fine Organic Industries Limited


Reports, Management Views on Fine Organic Industries IPO.

Angel Broking: “In terms of valuation, pre- issue works out to 22x of annualized FY18 EPS of `35 (at the upper end of the issue price band). We believe FOIL is strategically placed owing to (a) market leadership in Slip additive, (b) maintaining healthy operating margin in the range of 18-22% and (c) diversified client base along with geography mix. However, due to lack of immediate triggers in revenue growth wing to near to utilization level of current capacity and no major capacity additions in near future, we have a NEUTRAL view on the issue.”

Ajcon Global: ” It has strategically located production facilities with in – house development capabilities, h) strong R&D capability with a focus on innovation, i) diversified customer base with long term relationships with marquee customers, j)strong balance sheet with Net Debt: Equity at 0.1x, favourable Net Working Capital cycle of ~70 days, positive operating cashflow with decent RoE of 25%, we recommend “SUBSCRIBE”to the issue.”

Capital Market: “Score 43/100, Galaxy Surfactants, nearest comparable listed player focused on surfactants and other specialty chemicals for the personal- and home-care industries with consolidated net sales of Rs 2433.91 crore and net profit of Rs 158.03 crore is currently trading at P/E of around 28.6 times FY 2018 EPS of Rs 44.6.”

Choice Broking: 
On valuation front, at higher price band, the company is demanding a P/E valuation of 30.6x as against the peer average of 24.2x. With respect to FY18E and FY19E EPS too, it is asking a premium valuation. Thus, the issue seems to be fully priced. However, considering the global market position, benefits arising from the capacity expansion, stable margin & profitability and limited competition, we assign a “Subscribe with Caution” rating to the issue with long term investment horizon.”

GEPL:Fine Organics Industries Ltd (FOIL) stands to gain from operating leverage. At a P/E of 31x of FY17 EPS. We believe that it demands a discount to its domestic peers. We assign a Subscribe rating to the IPO.

ICICIDirect : “At the upper price band of | 783, FOIL is available at MCap/sales of ~3.0x and P/E of ~30x on FY18 numbers (annualised given 9MFY18 numbers). FOIL possess healthy balance sheet with Net Debt: Equity at 0.1x, average NWC days ~70 days and robust return ratios profile (FY17 RoE at 25%). We advise SUBSCRIBE on FOIL for long-term perspective .”

SP Tulsiyan website:
“Near debt free status, healthy margins, high entry barriers (as typical additive approval time ranges between 3-5 years) are key positives for the company, catering to the growing consumption related industries. Since issue pricing is more-or-less in line with listed peers, one can expect moderate listing gains. If one has a longer view, the stock looks very promising. Hence, advised to add this stock to one’s portfolio, to witness some ‘fine’ gains over the medium-to-long term.” 


Standard disclaimer:  I am not a SEBI registered analyst and above analysis is for educational purpose only. I may have vested interest in every stock I discuss and my views may be biased. Please do your own due diligence as stock market investments have high degree of inherent risk.