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Accent Microcell Limited IPO: Check Issue Size, Date, and Price Band 

08 Dec 2023

Introduction:

In the dynamic corporate world, Initial Public Offerings (IPOs) serve as crucial milestones for companies looking to raise working capital and expand their horizons. To investors, they present an opportunity to invest in promising companies and benefit from their long-term growth. One such IPO that has captured the attention of investors and enthusiasts alike is the Accent Microcell IPO.

Accent Microcell Ltd. is an SME company intending to raise to Rs. 78.40 crores through the IPO. This blog aims to provide a comprehensive guide to the Accent Microcell IPO, covering everything you need to know about the public issue to make an informed investment decision. 

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About the Issuing Company

Accent Microcell Limited is an almost decade-old company engaged in the business of producing high-quality cellulose-based excipients primarily for industries such as pharmaceutical, nutraceutical, food, cosmetics, and others. The company specialises in manufacturing Microcrystalline Cellulose (MCC), an odourless fine powder widely used as a texturiser, lubricant, binding agent, diluent, bulking agent, etc., in respective industries.

The company has a large global customer base, which includes clients from countries such as the United States of America (USA), Canada, Germany, United Kingdom (UK), China, Japan, Australia, Korea, Turkey, Italy, Vietnam, Indonesia, Egypt, Thailand, France, Brazil, Russia, Mexico, Chile, Greece, and Denmark. As of 31 March 2023, the company manufactures 22 grades of MCC, with particle sizes ranging between 20 to 180 microns.

Key Strengths of the Company

Assessing the issuing company's strengths can provide you with an idea of its future growth prospects and help you make an informed investment decision. Below are the key strengths of Accent Microcell Ltd. as portrayed in its Red Herring Prospectus (RHP):

  • The company has expanded its footprint rapidly in the domestic and international market
  • It has a large customer base spanning across more than 45 countries
  • It derives its revenues from diversified industries, including pharmaceutical, nutraceutical, and food
  • It is one of the largest producers of MCC worldwide
  • It has long-term contracts with strong and established raw material suppliers
  • The company is known to maintain robust product quality and service standards
  • It has received numerous quality-adherence certifications from the government and private agencies

Key Risks or Weaknesses Highlighted

Analysing risks and weaknesses can provide insights into threats hindering a company’s long-term growth. Below are the key risks or weaknesses associated with Accent Microcell Ltd. as highlighted in the RHP:

  • The company has an active legal proceeding against it
  • It is heavily reliant on the pharmaceutical industry for its revenue
  • The sales and revenues are exposed to the uncertainties associated with the international markets
  • There is a possibility of a conflict of interest between the company and certain groups
  • It relies heavily on limited suppliers to source raw materials

Core Financials of the Company

You must analyse the issuing company’s financials before investing in its IPO. Make sure the company has growing revenues and a high net worth. Furthermore, the company should not have a huge amount of debt. The table below depicts the core financials of Accent Microcell Ltd. for the last three financial years:

Particulars Period Ended August 23, 2023 As of and for FY Ended March 31
2023 2022 2021
Share Capital 8 4 4 4
Net Worth 10 6 5 4
Total Borrowings 15 14 10 6
Revenue From Operations 57 129 39 38
Profit After Tax 2 2 0.3 0.3
Earnings Per Share (Diluted) 2.4 2.6 0.4 0.3
Return on Net Worth (%) 18% 31% 6% 6%

*Amount in Crores

Source – RHP Dated 1 December 2023 on SEBI website

Details of the IPO

Accent Microcell IPO opens for public subscription on Friday, 8 December 2023, and closes on Tuesday, 12 December 2023. The company has fixed the price band for the IPO as Rs. 133 to Rs. 140 per share and plans to raise up to Rs. 78.40 crores. The IPO has only the fresh issue component without an offer for sale. Refer to the table below for more IPO details:

IPO Date 8 December to 12 December 2023
Basis of Allotment 13-Dec-23
Listing Date 15-Dec-23
Face Value Rs. 10 per share
Price Band Rs. 133 to Rs. 140
Lot Size 1000 shares
Total Issue Size 5,600,000 equity shares (Worth Rs. 78.40 crores)
Fresh Issue 5,600,000 equity shares (Worth Rs. 78.40 crores)
Listing At NSE SME

To conclude

Accent Microcell IPO looks attractive, considering the issuing company’s global footprint and robust financials. However, you must consider several other factors, such as the prevailing market conditions and your investment goals, before making the final decision. Should you need a Demat account to invest in IPOs, you can get it for free with Motilal Oswal. 

 

Related Articles:  How to Analyse an IPO | What is IPO Grading? | What is Cut Off Price In IPO Application 

 

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