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Specialty ingredients manufacturer Gem Aromatics is set to debut in the secondary market tentatively on Tuesday, August 26, after the Mumbai-based company’s initial public offer concluded last Thursday with a total subscription of 30.3 times. Zee Business Managing Editor Anil Singhvi found the IPO to be reasonably priced, suggesting risk-taking investors apply for a small listing gain. 

Here’s everything to know about Gem Aromatics:

Singhvi has identified the following key points about the secondary market-bound:

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Positive:

The company's promoters are experienced and qualified 

The company has a Diversified product portfolio 

It commands a strong customer base in the domestic as well as foreign markets

Negative: 

The company's business is seasonal; this requires it to have huge amounts of working capital 

The company has seen an increase in its short- and long-term borrowings

In FY25, the company had a negative cashflow 

ALSO READ: Gem Aromatics IPO subscribed 30.45 times; allotment likely today, listing on August 26

Gem Aromatics IPO

The IPO -- comprising fresh issuance of Rs 175 crore and an offer for sale (OFS) worth Rs 276 crore -- was open for subscription from August 19 to August 21.

According to provisional exchange data, the portions set aside for qualified institutional buyers (QIBs) and non-institutional investors (NIIs) were booked 55.3 and 45.1 times, respectively.

The portion reserved for retail individual investors (RIIs) saw a subscription of 10.3 times the equity on offer, according to the data.

For the financial year 2024-25, Gem Aromatics registered a net profit of Rs 53.4 crore with total income of Rs 505.6 crore, according to the red herring prospectus.

For the previous financial year, the company’s net profit had stood at Rs 50.1 crore with Rs 368.6 crore in revenue. 

Some of the listed peers of the secondary market-bound company are going to be Clean Science and Tech, Privi Speciality Chem, Camlin Fine Sciences, Yasho Industries, SH Kelkar and Company, and Oriental Aromatics.

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