Valiant Laboratories IPO subscribed 21% on Day 1
On the first day of bidding for Valiant Laboratories’ initial public offering (IPO), which is valued at Rs 152.46 crore, investor response stood at 21 percent. By the afternoon of September 27, bids were received for 15.98 lakh shares out of the total IPO size of 76.23 lakh shares. Retail investors displayed relatively stronger interest by subscribing to 40 percent of the shares set aside for them.
In contrast, high net worth individuals (HNIs) bid for only 4 percent of their allocated quota of shares. It’s noteworthy that qualified institutional buyers (QIBs) had not yet participated in the offering, with half of the IPO reserved for this segment, which often plays a significant role in determining the overall subscription rate. The response from QIBs in the coming days will likely influence the final subscription figures for the IPO.
Fifteen percent of the IPO, which consists solely of fresh issue shares, has been set aside for high net worth individuals (HNIs), while the remaining 35 percent has been allocated to retail investors. Anchor investors showed strong interest in the pharmaceutical ingredient manufacturing company, purchasing shares worth Rs 45.74 crore at the upper end of the price band. The price band for the offering, which is scheduled to close on October 3, ranges from Rs 133 to Rs 140 per share.
Notably, there were four anchor investors involved in this IPO: Leading Light Fund VCC – The Triumph Fund, Saint Capital Fund, Astorne Capital VCC – Arven, and Negen Undiscovered Value Fund. Their participation is indicative of initial investor confidence in the company’s prospects.
The allocation of the proceeds from Valiant Laboratories’ IPO sheds light on the company’s strategic priorities and its vision for the future. A significant portion of the funds, amounting to Rs 80 crore, has been earmarked for the establishment of a state-of-the-art manufacturing facility for specialty chemicals in Gujarat. This investment reflects Valiant’s commitment to expanding its capabilities in the chemical manufacturing sector. Gujarat, with its robust industrial infrastructure, is a strategic choice for setting up this facility, which will cater to the needs of its subsidiary, Valiant Advanced Sciences (VASPL).
The decision to allocate Rs 45 crore to meet the working capital requirements of VASPL is crucial for ensuring the smooth operation and growth of this subsidiary. Adequate working capital is essential for day-to-day operations, including procurement of raw materials, managing operational expenses, and facilitating business expansion. By providing this financial support, Valiant Laboratories is positioning VASPL for sustainable growth and success in the specialty chemicals market.
The remaining funds from the IPO will be directed toward general corporate purposes. While this category is broad and can encompass various operational and administrative needs, it underscores Valiant’s commitment to maintaining a strong financial foundation and addressing any unforeseen contingencies that may arise. These funds can be used to support research and development initiatives, strengthen the company’s market presence, invest in technology and innovation, and enhance overall corporate efficiency.
In summary, Valiant Laboratories’ allocation strategy reflects a well-thought-out plan to leverage the IPO proceeds for strategic expansion, subsidiary growth, and overall corporate resilience. It signals the company’s readiness to take advantage of emerging opportunities in the specialty chemicals sector while maintaining financial stability and operational flexibility.
Valiant Laboratories, headquartered in Mumbai with a manufacturing facility located in Palghar, Maharashtra, is primarily owned by its promoters, including Dhanvallabh Ventures LLP, which holds the largest stake at 62.5 percent. Promoters Shantilal Shivji Vora and Santosh Shantilal Vora each have a 10.01 percent stake in the company.
It’s worth noting that Valiant Organics, which is a listed entity on both the BSE and NSE, serves as the promoter of Dhanvallabh Ventures LLP, holding a substantial 73.15 percent stake in the latter.
As of now, Valiant Laboratories’ shares have not commenced trading in the grey market. The grey market is an unofficial platform where IPO shares can be bought and sold before their official listing on the stock exchange. The absence of trading activity in the grey market may indicate that trading has not yet gained momentum among unofficial market participants, possibly due to various factors affecting investor sentiment and demand for the company’s shares.
