Aster Silicates slumps after strong debut

Shares of Aster Silicates Ltd. doubled on debut before tumbling by 20% on the last trading day of the week. The stock closed the week at Rs196.30. It had been as high as Rs258 during the week and as low as Rs123. The issue price was fixed at the higher end of the price band of Rs112-118 a share. The IPO of sodium silicate maker was open between June 24 and June 28. The issue was subscribed 4.47 times. Sodium silicate includes food grade sodium silicate, special drilling grade silicate and detergent grade silicate. Aster produces sodium silicate both in glass and liquid form. Food grade sodium silicate is used in the manufacturing of Silica precipitate and Gel, which finds its applications in toothpaste, salt, cosmetics, glucose powder, tyre, rubber and pesticides etc. Sodium silicate, (special drilling grade silicate) is also used in off-shore drilling and for reactivation of old oil and gas fields. Aster intends to use issue proceeds for expansion of manufacturing facilities and additional working capital requirements.

Grey Market Premiums - Aster Silicates, Technofab Engineering, Hindustan Media Ventures

Company Name	Offer Price (Rs.)	Premium (Rs.)
Aster Silicates Ltd.	112 to 118	8 to 8.50
Technofab Engineering	230 to 240	12 to 13
Hindustan Media Ventures	162 to 175	6.5 to 7

Aster Silicates IPO subscribed nearly 3 times

Gets bids for 1.28 crore shares

The initial public offer of Aster Silicates, which manufactures sodium silicate, was subscribed 2.7 times by 15:00 IST on Monday, 28 June 2010. The IPO got bids for 1.28 crore shares compared with 47.41 lakh shares on offer.

Aster Silicates IPO Note

Aster Silicates IPO Note

Aster Silicates IPO Analysis

Aster Silicates is promoted by Mahesh A. Maheshwari and Namrata M. Maheshwari. It is engaged in the business of manufacturing of sodium silicate, which includes food-grade sodium silicate, special drilling grade silicate and detergent grade silicate. Currently, it operates from two units in Gujarat with aggregate installed capacity of 150 tonnes of glass per day. Unit I at Kheda has a capacity of 100 tonnes of glass per day and Unit II at Bharuch has a capacity of 50 tonnes of glass per day.

Aster Silicates, Parabolic Drugs Grey Market Premiums

Parabolic Drugs Ltd.	75 to 85	Discount
Aster Silicates Ltd.	112 to 118	2 to 2.50