Omkar Speciality IPO looks expensive:SPA Securities

MUMBAI: SPA Securities is of the view that the initial public offering of Omkar Speciality Chemicals looks expensive as compared to peers. The company has entered the primary market to raise between Rs 77 crore to Rs 79 crores by issuing shares in the price band of Rs 95-98 per share.

The company is engaged in manufacturing and sale of specialty chemicals and currently operates through two manufacturing units located in Maharashtra with a capacity of 750 mtpa.

“At the upper band of Rs 98, the stock is available at a P/E and P/BV multiple of 37.5x and 2.0x based on its FY10 EPS of Rs 2.6 and post issue BVPS of Rs 48.6. Capacity expansion will help the company to expand its product line as well as increase its geographical presence. However, the issue seems quite expensive based on current peer group valuations,” the report said.

The proceeds will be used to set up new manufacturing facilities, expansion of existing manufacturing facilities and for working capital requirements.

The issue closes Thursday.