HP Adhesives, an adhesives and sealants company, is launching its initial public offer on December 15, Wednesday, with a fixed price band at Rs 262-274 a share.

Investors can bid for a minimum of 50 shares at Rs 13,700 ( Rs 274*50 shares) and a maximum of 14 lots or 700 shares ( in the multiples of 50) at Rs 1,91,800. 

The company said its price-to-earnings ratio based on diluted EPS for the fiscal 21 at the upper price band is 35.40 times, corresponding to the average industry P/E ratio of 81.28 times.

The window for public subscription will open on December 15 and close on December 17.

The IPO will be listed on Indian bourses on December 27, 2021.

The 45.97 lakh equity shares IPO consists of a fresh issue of 41.40 lakh equity shares and an offer-for-sale (OFS) aggregating to 4.57 lakh equity shares by Anjana Haresh Motwani.

According to the red herring prospectus, the offer will represent 25.02 percent of the company's post-offer paid-up equity share capital.

The proceeds from the share sale would be used to meet working capital requirements and expand production capacity at the company's existing manufacturing plant in Narangi village, Maharashtra's Raigad district, as well as an additional unit on an adjacent property. Besides, the funds will be directed towards the expansion of installed capacities for its product lines and adding new products to the existing portfolio.

One-third of the net issue is earmarked for qualified institutional buyers (QIBs), whereas non-institutional buyers have 15 per cent shares reserved for them. Retail investors will have a quota of 10 percent of the offer.

HP Adhesives reported a profit of Rs 10.06 crore in FY21, versus a loss of Rs 4.67 crore in the prior-year period, while revenue rose to Rs 118.16 crore from Rs 95.47 crore.

Profit in the trailing six months period ending September 20201 increased to Rs 3.1 crore from Rs 2.93 crore in the prior-year period. Revenue rose to Rs 70.51 crore from Rs 44.92 crore.