Gem Aromatics IPO: Should you subscribe to the ₹451 crore issue opening today?

Gem Aromatics IPO: Should you subscribe to the ₹451 crore issue opening today?Gem Aromatics is a manufacturer of specialty ingredients in India, including essential oils, aroma chemicals, and value-added derivatives. Its client portfolio includes names like Colgate-Palmolive, Dabur, Patanjali, SH Kelkar, Rossari Biotech, and Symrise, among others.By Meghna Sen August 19, 2025, 9:06:37 AM IST (Published)3 Min ReadThe initial public offering (IPO) of Gem Aromatics, a manufacturer of speciality ingredients, will kick off for subscription on Tuesday, August 19. The company aims to raise ₹451.25 crore through the issue, that closes on August 21.

The Mumbai-based company has mobilised over ₹135 crore from anchor investors on Monday. Citigroup Global, Societe Generale, Goldman Sachs, Nippon India Mutual Fund, SageOne, Nuvama, and Niveshaay Sambhav Fund participated in the anchor round.

What analysts say

Brokerage firm SBI Securities in its note wrote that the total capacity of Gem Aromatics has grown at 12.5% CAGR between FY23-25. The company is enhancing its manufacturing capacity in Dahej while also widening its product portfolio (new product category citral with products including safranal and damascene) which will aid in deriving sustainable growth.

The company's business is working capital heavy due to extended receivable days on exports; higher inventory of mint due to limited procurement period; higher SKUs to cater to client's requirements.

At the upper price band, Gem Aromatics is valued at post issue capital FY25 PE of 31.8x, which looks attractive than its peers, the brokerage said while recommending investors to 'Subscribe' to the issue at the cut-off price for long term.

Anand Rathi believes that the IPO is fully priced and has recommended a 'Subscribe-long term”' rating to the IPO.

Gem Aromatics IPO price band

The price band has been set at ₹309 to ₹325 per share. Investors can bid for a minimum of 46 shares and in multiples thereof.

The IPO is a mix of fresh issue of equity shares worth up to ₹175 crore and an offer for sale (OFS) of up to 85 lakh shares valued at ₹276.25 crore.

Proceeds from the fresh issue will be used by Gem Aromatics for debt repayment and general corporate purposes.

Company overview

Gem Aromatics is a manufacturer of specialty ingredients in India, including essential oils, aroma chemicals, and value-added derivatives, with over two decades of experience. In FY25, the company supplied products to 225 customers domestically and 44 customers cumulatively across 18 foreign countries globally, including the Americas, Asia, Africa and Australia.

Its client portfolio includes names like Colgate-Palmolive, Dabur, Patanjali, SH Kelkar, Rossari Biotech, and Symrise, among others.

The company operates three advanced manufacturing facilities located in Uttar Pradesh, Dadra and Nagar Haveli, and Gujarat.

Gem Aromatics' revenue from operations increased by 11% to ₹504 crore in fiscal 2025 from ₹452.45 crore in the previous fiscal, and profit rose 6.55% to ₹53.38 crore for fiscal 2025 from ₹50 crore in the preceding financial year.

Book running lead managers

Motilal Oswal Investment Advisors is the sole book-running lead manager, and KFin Technologies is the registrar to the offer.

The allotment for the Gem Aromatics IPO is expected to be finalised on August 22, while the company's shares will be listing on BSE and NSE with a tentative listing date fixed as August 26.Continue ReadingNote To ReadersDisclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!TagsIPO