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19 January 2024

Accent Microcell IPO: A Global Leap in Pharmaceutical Excipients

Introduction:

Accent Microcell Limited, a key player in the manufacturing of cellulose-based excipients for various industries, recently entered the capital market with an Initial Public Offering (IPO). The IPO, valued at Rs 78.40 crores, witnessed robust demand from investors. In this blog, we delve into the details of Accent Microcell's IPO journey, from bidding to listing, and explore the company's performance post-IPO.

Key Dates:

Bidding Period	Allotment Date	Listing Date
December 8 to December 12, 2023	December 13, 2023	December 15, 2023

IPO Highlights:

Issue Size	Price Band	Lot Size	Minimum Investment
₹78.40 Crores	₹133 to ₹140 per share	1000 Shares	₹140,000 for retail investors

Financial Overview:

Total Issue Size	Fresh Issue
5,600,000 shares, aggregating up to ₹78.40 Cr	5,600,000 shares

Shareholding Structure:

Pre-Issue Shares	Post-Issue Shares
15,443,000	21,043,000

Market Maker Segment:

Prabhat Financial Services	280,000 shares

IPO Management:

Lead Manager	Registrar	Market Maker
Corporate Capitalventures Pvt Ltd	Kfin Technologies Limited	Prabhat Financial Services

Subscription Highlights:

The Accent Microcell IPO garnered an overwhelming subscription of 362.41 times, reflecting immense investor interest across various categories. Retail investors displayed significant enthusiasm with a subscription of 409.95 times, while Non-Institutional Investors (NII) showcased an impressive subscription of 576.70 times. Qualified Institutional Buyers (QIBs) also actively participated in the bidding process.

IPO Journey Timeline:

IPO Open Date	IPO Close Date	Basis of Allotment	Refunds Initiation	Shares Credited to Demat	Listing Date
December 8, 2023	December 12, 2023	December 13, 2023	December 14, 2023	December 14, 2023	December 15, 2023

Lot Size Details:

Investors had the flexibility to bid for a minimum of 1000 shares, with the following investment parameters for retail investors and High Net Worth Individuals (HNIs):

Application	Lots	Shares	Amount
Retail (Min)	1	1000	₹140,000
Retail (Max)	1	1000	₹140,000
HNI (Min)	2	2000	₹280,000

Accent Microcell IPO Reservation:

The IPO featured a reservation of 5,600,000 shares, allocating portions to various investor categories, including Anchor Investors, Market Makers, and Retail, HNI, and QIB segments.

About Accent Microcell Limited:

Founded in 2012, Accent Microcell Limited specializes in manufacturing cellulose-based excipients catering to pharmaceutical, nutritional supplements, food, cosmetics, and other industries. The company offers a diverse range of products marketed under brand names like Accel, Acrocell, Maccel, and Vincel.

Product Portfolio:

Spray-dried Products:
- Microcrystalline Cellulose (MCC)
- Microcrystalline Cellulose Spheres (MCC Spheres)
- Silicified Microcrystalline Cellulose (SMCC)
- Powdered Cellulose (PC)
- Microcrystalline Cellulose with Carboxy Methyl Cellulose (Co-Processed)
Spin-flash-dried Products:
- Croscarmellose Sodium (CCS)

Manufacturing Facility:

Accent Microcell operates two manufacturing facilities in Ahmedabad and Bharuch, with a total capacity of 8,000 metric tonnes. The company serves customers in 45 countries, exporting products to regions including the US, Canada, Germany, the UK, Japan, China, Australia, and many others.

Financial Overview:

As of June 30, 2023, Accent Microcell exhibited a strong financial performance:

Metric	Values
Assets	₹12,214.89 Lakhs
Revenue	₹5,992.95 Lakhs
Profit After Tax	₹705.53 Lakhs
Net Worth	₹5,125.44 Lakhs
Reserves and Surplus	₹3,831.14 Lakhs

Key Performance Indicators:

- Market Capitalization: ₹294.6 Crores
- Return on Equity (ROE): 34.11%
- Return on Capital Employed (ROCE): 26.46%
- Debt/Equity: 0.52
- Return on Net Worth (RoNW): 29.44%

Objects of the Issue:

The Net Fresh Issue Proceeds will be utilized for:

- Setting up a plant at Navagam Kheda for manufacturing Croscarmellose Sodium ("CCS") - Sodium Starch Glycolate - Carboxymethylcellulose (CMC) - General Corporate Expenses

Conclusion:

Accent Microcell Limited, with its global footprint in MCC products, has shown consistent growth in its top lines. However, the sudden surge in bottom-line figures from FY23 onwards warrants careful consideration. The IPO, priced based on its super-annualized FY24 earnings, may present a fully priced scenario. Informed investors, with a medium to long-term perspective, may find potential rewards in Accent Microcell, considering its steady growth and position in the global pharmaceutical excipients market.

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