India Pesticides Limited IPO (India Pesticides IPO): A Detailed Guide

  • 0
  • July 7, 2021
India Pesticides IPO Launch Date & Price

India Pesticides IPO Launch Date & Price

Some of the biggest agri-reforms in India are on their way. The government of India is targeting to double the farmer’s income by 2022. The farm bills, albeit under controversy, are poised to bring monumental changes in the agriculture economy. As India aims to touch the USD 5 trillion economy benchmark by 2024-25, agriculture will play a key role in contributing 25-30% to the GDP.

India crop protection chemicals exports are anticipated to rise to about 55% in 2024 in terms of value. In 2024, it is expected that the agri-export will rise to USD 3.1 bn, sharing about 55% of total local production, which is anticipated to be valued at USD 5.7 bn. Further, roundabout 19 technicals are anticipated to go off-patent from 2019 until 2026. An opportunity size of over USD 4.2 bn is expected, due to this, by 2026.

India Pesticides Limited, a leading agrochemicals-focused company, recently filed a draft red herring prospectus (DRHP) with SEBI and is looking to raise Rs. 800 crore via an initial public offer (IPO). The market is already abuzz with growth opportunities in the speciality chemicals and agrochemicals space. It is already turning out to be an Indian success story. Here is all you need to know about the company, the India Pesticides IPO launch date, the India Pesticides IPO price, and how to apply for India Pesticides IPO.

Global Agrochemical Industry

Crop protection chemicals are primarily classified into insecticides, herbicides, fungicides, nematicides, and rodenticides. This classification is based on the fact that a crop needs protection from insects, herbs, fungus, nematodes, or rodents.

The global agrochemicals market was valued at USD 62.5 billion in 2019 and is forecasted to reach USD 86 billion by 2024, growing at a compound annual growth rate (“CAGR”) of 6.6%. The growing population all over the world, accompanied by rising riches, is seeing a shift in consumption patterns. There is an immediate need to increase production to meet demand while ensuring that the nutritional needs of an increasingly wealthy population are met.

India Pesticides Company Details

Incorporated in 1984, IPL is one of the front liners in agrochemical manufacturing in India. An R&D-driven agrochemical manufacturer of Technicals with a growing Formulation business is among burgeoning agrochemical companies in India (in volume) in FY 2020.

The company’s core focus is on quality and sustainability, and none of the key Technicals is classified as ‘red triangle’ or highly toxic products. It is the only Indian manufacturer and one of the top five internationally for many Technicals like Folpet, Cymoxanil, and Thiocarbamate Herbicide. The company also manufactures fungicide and herbicide technicals and APIs (active pharmaceutical ingredients), along with herbicide, insecticide, and fungicide Formulations.

As per the DRHP, India Pesticides Ltd has two manufacturing facilities in Uttar Pradesh with 19,500 MT for Technicals and 6,500 MT for the Formulation products. The company also has the license for selling 22 agrochemicals technical and 124 formulations in India and active exports for about 27 Technical and 34 Formulation products. As of the Draft Red Herring Prospectus date, IPL had obtained a license for manufacturing two drugs for sale at Dewa Road from the Drug Licensing and Controlling Authority under the Drugs and Cosmetics Rules, 1945.

More than 20 countries, from Asia, Africa, Australia, and Europe, import the Technicals from Indian Pesticide Company. It supplies Formulation products to several Indian companies like UPL Ltd, Syngenta Asia Pte Ltd, Conquest Crop Protection Pty Ltd, ASCENZA AGRO, S.A., Sharda Cropchem Limited, and Stotras Pty Ltd.

Strengths

  • Leading manufacturer of Folpet, Thiocarbamate, and Herbicide Technicals.
  • Research & Development (R&D) focused team with multiple patented products.
  • Long-term business relations with key domestic and international customers.
  • Export focus with a diversified portfolio of niche and quality specialized products.
  • Strong raw material sourcing capability.
  • A very robust and extensive distribution network established over decades.
  • Agile factories with the capacity to produce several types of products.

Risks

  • The company works in a highly regulated industry, and prospects depend on timely license approvals, domestic and export markets.
  • Agriculture is a seasonal business, and therefore agrochemicals that run on the back of agriculture become seasonal.
  • Since the company is a B2B player, it is dependent on specific key customers.
  • There are no long-term contracts with buyers.
  • COVID-19 has adversely impacted production and may continue to do so.
  • Alternatives in biotechnology products, pest-resistant seeds, or genetically modified crops may reduce demand.

Financials

India is currently the 4th-largest manufacturer of crop protection chemicals across the world. The cost-effective manufacturing in India is attracting many multinationals from across the globe, further aided by skilled labour. India is anticipated to emerge as an export centre for crop protection chemicals production, exported to several developed and developing countries.

IPL’s significant customers include global companies that aim to collaborate with active ingredient manufacturers in India, leveraging the benefits of cost-effective manufacturing supported by an efficient, cheap, skilled labour force and powerful R&D expertise. In Fiscal 2020 and the six months ended 30 September 2020, the company’s revenue generated from exports accounted for 62.12% and 65.73%, respectively, of total revenue from operations in such periods.

As per the DRHP, these are the latest available financials.

For the year/period ended ( Rs. million)
31-Sept-20 31-Mar-20 31-Mar-19 31-Mar-18 (proforma)
Total Assets 4,927.12 3,657.02 3,172.37 2,403.62
Total Revenue 3,372.43 4,897.27 3,460.42 2,558.57
Profit After Tax 722.95 707.99 439.21 327.54
Total borrowings (as per balance sheet) 216.26 280.39 610.59 459.21

About the IPO

The public offer will have a fresh issue of shares of up to Rs. 100 crore and an offer-for-sale (OFS) of Rs. 700 crore by the promoter selling shares. Anand Swarup Agarwal and ASA family trust are company promoters with majority shareholding (82.68%). The OFS will help promoters dilute their shareholding in the company.

As per the DRHP, the proceeds from the IPO will be used for –

  • Funding working capital requirement for the company to the tune of Rs. 80 crore.
  • General corporate purpose.

The company plans to begin pre-IPO placement with QIBs for about Rs. 75 crore, and the rest will be open for retail investors.

India Pesticides IPO Launch Date & Price

India Pesticides Limited filed the DRHP in Feb 2021 and has already received the SEBI nod. The IPO is open for subscription from 23 June 2021 and will close on 25 June 2021. India Pesticides IPO’s expected share price is the price band of Rs. 290-296; the lot size is 50 shares, and that is the minimum order quantity. The face value of each share is Rs. 1.

How To Apply For India Pesticides IPO with TradeSmart

The quickest way to apply for India Pesticides IPO for existing investors is through their Demat accounts. But, if you are new to investing and have never participated in primary markets or IPOs before, and are wondering how to apply for India Pesticides IPO, then head over to TradeSmart online for a quick, simple and smooth IPO application process.

You can register to the TradeSmart platform in a few simple steps and use their ‘Box’ interface to apply for India Pesticides IPO. First, select the “IPO” option from the ‘Portfolio’ menu in your TradeSmart Box account and then search for the India Pesticides IPO from the list of current and upcoming IPOs. Every important IPO information such as the open and close date, minimum order quantity, price range, and issue size will be visible next to the IPO name.

Once you have located the India Pesticides IPO in the list, click on the ‘Bid’ button next to participate in the IPO offer. TradeSmart allows you to bid for an IPO and pay through your UPI ID. So, all you have to do to bid for the India Pesticides IPO successfully is to enter your UPI ID linked to your bank account.

After completing the above step, you can easily apply for India Pesticides IPO by submitting your bid at the cut-off price or any other price that matches your investment budget. You can only place your bid for share quantity per the permissible lot size, which is also mentioned on the portal.

You can apply for one or multiple lots. After finalizing the quantity and price, you can confirm that you have read the RHP (Red Herring Prospectus or IPO Draft Prospectus) and accept the UPI mandate on your UPI app to block the IPO application amount.

With this, your application for India Pesticides IPO will be confirmed, and you would have participated in the IPO.

Leave a Reply

Open Account

Open Trading Account

Open an account with us! It barely takes few minutes!