India Pesticides Limited IPO (Initial Public Offering) opened for subscription yesterday and it got fully subscribed on first day of bidding. The public issue of the agrochemical manufacturer was subscribed 1.29 times on first day of bidding as there were bids for 2.49 crore equity shares of the company against 1093 crore equity shares offer. However, India Pesticides Limited IPO GMP (grey market premium) today has dipped around 50 per cent from its yesterday premium. India Pesticides Limited IPO GMP today is ₹38, which is almost half from its yesterday’s price of ₹68 to ₹70. According to market observers, this dip in the share price premium in grey market should not be taken seriously as the fundamentals of the company is important instead of this unofficial grey market.
Speaking on what GMP means for an IPO Avinash Gorakshkar, Head of Research at Profitmart Securities said, “GMP of an IPO is nothing but speculation about the listing gains. It is not an official data and it has nothing to do with the financials of the company. So, those who look at the GMP of a public issue ahead of bidding for the initial offer of the company, they are advised to first look at the financials of the company. In my opinion, one can subscribe India Pesticides Limited IPO for reasonable listing gains as company’s fundamentals are looking positive.”
Standing in sync with Avinash Gorakshkar’s views; Abhay Doshi, Founder at UnlistedArena.com said, “Grey market premium reflects short-term sentiment while financials of the company reflects long-term fundamentals. So, it’s financials of the company that matters the most instead of the GMP of an IPO.”
Highlighting upon the financials of India Pesticides Limited; Saurabh Joshi Research Analyst at Marwadi Shares and Finance Ltd. said, “India Pesticides IPO is going to list at P/E of 25.34 with a market cap of ₹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. We recommend subscribing this IPO 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.”
India Pesticides IPO price band has been fixed at ₹290 to ₹296.
India Pesticides IPO will remain open for subscription till 25th June 2021. Its share allotment will be finalised on 30th June 2021 while its listing at both NSE and BSE will take place on 5th July 2021.
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