Camlin Fine Sciences shares jump over 6% on open offer news
By Shivendra Kumar, Economic Times | April 18, 2023

Shares of Camlin Fine Sciences Limited (CFS) jumped over 6% in early trade on Tuesday after the company announced an open offer to acquire over 4.45 crore equity shares at a price of Rs 160 per unit.

Camlin Fine Sciences shares were trading at Rs 175.75 on the NSE and were up by Rs 10.90 or 6.61% from Monday closing price.

The open offer to acquire over 44,560,177 (4.45 crore) equity shares constituting 26% stake of Camlin Fine Sciences augurs well for the company, brokerage firm Axis Securities said, recommending a 'buy' on the stock.

Camlin Fine Sciences will benefit from diverse promoter experience for its future strategies and further strengthen its position as one of the key global suppliers of specialty chemicals, food chemicals and preservatives, Axis Securities said in a note.

"Ashish Dandekar, Promoter & Managing Director (with 8.66% stake in the company) signed a cooperation agreement with Infinity Investment Management (21.1% stake owner in CFIN) and Belgium-based Ackermans & van Haaren to become co-promoters, increasing the total promoter stake post open offer to 55.76%," Axis Securities said.

"We see this as a positive event further confirming promoters and investors belief in the underlying business and the promising future growth prospects of the business. We maintain our BUY rating on the stock valuing it at 18x FY24E implying a target price of 180 which translates to 11% upside potential from the CMP," the Axis Securities note said.

CFS is the one of the two largest Vanillin producers in the world catering largely to the US market. It manufactures traditional antioxidants (Shelf Life Solutions) focusing on 4 key businesses – shelf life solutions, aroma ingredients, health & wellness and performance chemicals.

"Global demand for CFS products remains robust despite the ongoing global volatility as 80-85% of CFS products are directly or indirectly used in human food consumption, the demand for which is relatively inelastic," the Axis note said further.

CFS is also working towards developing new downstream products to enhance its product basket, the note said.

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