India Pesticides shares list at Rs 360, a 21% premium over IPO price
Agrochemicals company India Pesticides shares listed at Rs 360 – a 21.62 percent premium – on July 5. The stock opened at Rs 360 on the BSE, against issue price of Rs 296.
At 10:13 hours IST, the stock was trading at Rs 355.75, up 20.19 percent with volume of 11.02 lakh equity shares on the BSE.
On the National Stock Exchange, it was quoting at Rs 356.20, rising 20.34 percent with volume of over 1.27 crore equity shares.
The Rs 800-crore initial public offering of India Pesticides was subscribed 29 times during June 23-25. The company will utilise fresh issue proceeds of Rs 100 crore for working capital and general corporate purposes, while the rest Rs 700 crore will go to shareholders who sold their stake.
India Pesticides is an R&D driven agrochemicals manufacturer of Technicals with a growing Formulations business, having 2 manufacturing facilities in Uttar Pradesh. As of March 2021, its aggregate installed capacity of manufacturing facilities for agrochemical Technicals was 19,500 million tonnes (MT) and Formulations was 6,500 MT.
Analysts bet on the company given its strong financials, healthy balance sheet with low debt/equity, good client base and attractive valuations among peers.
“We are optimistic on overall agrochemicals & API manufacturing business which has high entry barriers like registrations & licenses to manufacture for domestic as well as for export business (20+ countries), whereas IPL stands strong and healthy catering to these segments,” said Prashanth Tapse, VP Research at Mehta Equities.
It is one of the fastest growing agrochemicals companies in India in terms of volume of Technicals manufactured. The company had seen a 37.2 percent YoY growth in Technicals manufacturing (by volume) between FY20-FY21.
The company is the sole Indian manufacturer of 5 Technicals and among the leading manufacturers globally for Captan, Folpet and Thiocarbamate Herbicide, in terms of production capacity. It also diversified into manufacturing herbicide and fungicide Technicals, active pharmaceutical ingredients (APIs) for dermatological products.
The company has strong customer relationships which currently comprises a number of multinational, regional and local companies that includes crop protection product manufacturing companies such as Ascenza Agro, SA, Conquest Crop Protection Pty Ltd, Sharda Cropchem Ltd, Syngenta Asia Pacific Pte Ltd, Stotras Pty Ltd and UPL.
India Pesticide has demonstrated consistent growth in terms of revenues and profitability over the last three years, with healthy balance sheet with long term debt/equity of 0.02x and enjoying good return on equity (ROE) of 34.63 percent in FY21, is one of the best in agrochemicals industry.
During FY19-FY21, its revenues registered a CAGR of 90.48 percent and EBITDA registered a CAGR of 63.5 percent.