India Pesticides IPO subscribed 11.67 times on Day 3

The initial public offer (IPO) of India Pesticides Limited has been subscribed 11.67 times on June 24, the second day of bidding.

According to the subscription data available on the exchanges till 14:30 IST, the offer has received bids for 22,53,89,500 equity shares against the IPO size of over 1,93,10,345 equity shares.

The company had raised Rs 240 crore from anchor investors. According to a regulatory filing, the company has decided to allot 81,08,107 equity shares to 12 anchor investors at Rs 296 per equity share. At this price, the company will fetch Rs 239.99 crore.

Abu Dhabi Investment Authority, Tara Emerging Asia Liquid Fund, and BNP Paribas were Among the foreign portfolio investors who participated in the anchor book.

The domestic investors were SBI Mutual Fund, Nippon India Mutual Fund, Tata Mutual Fund, Bajaj Allianz Life Insurance Company, Bharti AXA Life Insurance Company, and Winro Commercial India Ltd.

The agrochemical company has fixed a price band of Rs 290-296 per share for its IPO.

“Considering the FY21 adjusted EPS of 11.68 on a post-issue basis, the company is going to list at PE of 25.34 with a market cap of Rs. 34,088 million whereas its peers namely Dhanuka Agri, UPL Ltd., Rallis India and PI Industries are trading at a P/E of 21.4, 20.4, 31.5, 58.6 respectively,”  said analysts at Marwadi Financial Services.

They have also given a ‘subscribe’ rating to the issue as the company is one of the fastest-growing agrochemical company in India with strong R&D capabilities and a diversified product portfolio. Also, the company is available at reasonable valuations as compared to its peers.

The 800-crore IPO comprises fresh issue of equity shares amounting to Rs 100 crore and an offer of sale for equity shares aggregating up to Rs 281.4 crore by promoter Anand Swarup Agarwal and up to Rs 418.6 crore by other selling shareholders.

The firm intends to use proceeds of the fresh issue towards funding the working capital requirements and general corporate purposes.

Allotment of shares will be carried out on June 30. The share will list on BSE and NSE on July 5, 2021.  Axis Capital and JM Financial are the book running lead managers to the issuer.

One can apply in the IPO in a lot size of 50 shares by spending Rs 14,800.

A maximum of 13 lots or  650 shares can be applied for by a retail investor for Rs 1,92,400.

The Uttar Pradesh-based company is likely to undertake a pre-IPO placement of Rs 75 crore subject to consultation of the merchant bankers.

India Pesticides is an R&D focused agrochemical technical company, which has growing formulations business in herbicides, insecticides and fungicide segments. It also manufactures active pharmaceutical ingredients (APIs).