Astron Paper Mills has been rising rapidly since listing, jumping to its current share price of Rs. 152 per share, compared to its issue price of Rs. 45-50 per share.
The manufacturer of craft paper had its IPO subscribed 243 times when the issue opened in December 15-20. APBML’s IPO offering at Rs. 45-50 per share put it at a P/E multiple of 12.2x (based on FY18E annualized EPS of Rs4.1). Analysts noted that the issue was in line with other peer valuations - Genus Paper & Boards trades at a P/E multiple of 24.5x and Shree Ajit Pulp & Paper at 12.6x.
The industry is seeing some opportunity - China's ban on waste paper imports has reduced raw material costs for companies, pointing to potentially higher margins in the coming quarters. However, share prices of peer companies have not increased significantly, suggesting that the share price rise for Astron Paper is at least partly speculative, helped along by bulk deals towards the end of December.