New Delhi, Aug 26 (HS): Specialty chemicals maker Gem Aromatics Ltd. had a dull debut on the Indian stock exchanges Tuesday, as its shares opened flat and later came under heavy selling pressure, erasing early gains and leaving IPO investors in the red on listing day.

The company had priced its shares at ₹325 apiece in the public offering. On debut, the stock listed flat on the BSE at ₹325, while on the NSE it opened slightly higher at ₹333.10. Initial buying interest drove the scrip to an intraday high of ₹349.60. However, profit-booking and persistent selling soon dragged the stock down, and it finally closed at ₹319.05 on the BSE, marking a 1.83% loss for IPO investors compared with the issue price.

Gem Aromatics had launched a ₹451.25-crore IPO between August 19–21, which received a robust response, being 30.45 times oversubscribed overall. The Qualified Institutional Buyers (QIB) portion was subscribed 53.76 times, the Non-Institutional Investor (NII) quota 45.96 times, while the Retail category saw 10.49 times subscription.

The issue comprised a fresh equity sale worth ₹175 crore and an offer for sale (OFS) of 85 lakh equity shares (face value ₹2). Proceeds from the fresh issue will be used to reduce the debt of its subsidiary Crystal Ingredients, meet working capital requirements, and for general corporate purposes.

On the financial front, the company has reported consistent earnings growth. Net profit rose from ₹44.67 crore in FY23 to ₹50.10 crore in FY24, and further to ₹53.38 crore in FY25. Revenue expanded at a CAGR of over 9%, reaching ₹505.64 crore in FY25. However, debt levels surged during the same period, climbing from ₹89.36 crore at the end of FY23 to ₹111.13 crore in FY24, and further to ₹222.37 crore by FY25-end.

Despite strong fundamentals and solid subscription numbers, investors were left disappointed as the stock failed to sustain its listing premium.

Hindusthan Samachar / Jun Sarkar