₹136 price band, 80 rupees GMP, IPO can generate profit on the day of listing itself

New Delhi. Kronox Lab Sciences Limited’s IPO will open on June 3. Investors will be able to bid for the shares of this issue till June 5. Through this issue, the company wants to raise a total of 130.15 crores. New shares will not be issued in the IPO, but the company promoters and existing investors will sell 9,570,000 shares through Offer for Sale (OFS). Promoters Joginder Singh Jaswal, Ketan Ramani and Pritesh Ramani are the selling shareholders in the OFS, each of whom will sell 31.9 lakh shares. The issue will open for one day on May 31 for anchor investors. In the gray market, the unlisted shares of Kronox Lab Sciences IPO are trading at a premium of 59 percent.

Gujarat-based Cronox Lab Sciences Ltd manufactures high purity specialty fine chemicals for pharmaceutical, agro chemical, personal care, metal refinery and animal health products industries. It sells over 185 products including phosphates, sulphates, acetates, chlorides, citrates, nitrates, nitrites, carbonates and gluconates in over 20 countries including India. The company’s profit in the first nine months of FY24 grew 9.8 per cent year-on-year to Rs 15.5 crore. But revenue fell 8.7 per cent to Rs 67.7 crore during the same period.

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Price Band ₹129- ₹136
The price band of Chronox Lab Sciences IPO has been fixed at ₹129- ₹136 per share. There are 110 shares in one lot of this IPO. One has to apply for a minimum of one lot. If a retail investor bids for 1 lot as per the upper price band of ₹136 of the IPO, then he will have to pay ₹14,960. A retail investor can bid for a maximum of 13 lots i.e. 1430 shares. In this way, he can invest a maximum of ₹194,480 in this IPO.

35% reserved for retail investors
Chronox Lab Sciences Limited has reserved 50 per cent of the IPO for Qualified Institutional Buyers (QIB). Apart from this, about 35 per cent is reserved for retail investors and the remaining 15 per cent is reserved for non-institutional investors (NII).*

Gray market is giving indication of profits
The unlisted shares of Chronox Lab Sciences IPO are getting a good response in the grey market. According to IPOwatch, a website that monitors the grey market, before the IPO opened, the company’s shares reached a premium of 58.82% i.e. ₹ 80 per share in the grey market. In such a situation, according to the upper price band of ₹ 136, its listing can happen at ₹ 216.

The point to note here is that the GMP of IPO shares is not permanent and it can fluctuate. Also, it is not necessary that the issue whose shares are trading at a premium in the grey market should also be listed in the stock market at a premium. The opposite can also happen. That is, the shares can also be listed at a discount.

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