Heranba Industries IPO of Rs 625-crore will open for subscription on Tuesday, February 23, 2021. Heranba Industries is a Gujarat-based crop protection chemical manufacturer. Heranba Industries IPO comprises of offer for sale of Rs. 565.2 crore and fresh issue of Rs. 60 crore. Proceeds from the fresh issue will be used for working capital requirements and general corporate purposes.

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Heranba Industries IPO Details

Issue Period23rd Feb – 25th Feb , 2021
Issue DetailsFresh Issue of Equity Shares upto ₹ 60 Cr
 + Offer for Sale of 9,015,000 Equity Shares
Issue Size (₹ Cr)₹ 624.34 – 625.24 Cr
Price Band₹ 626 – 627
Bid Lot23 Shares
Issue Structure : 
QIB50% of the offer
NIB15% of the offe
Retail35% of offer (  34,90,178 Shares ;  ₹ 218.83 Cr)


  • ANCHOR ISSUE: IPO bound Heranba Industries has raised Rs 187.51 crore by allotting 29.91 lakh shares to 18 anchor investors, on Monday, a day prior to its issue opening for public bidding. The largest portion was subscribed by Government Pension Fund Global (18.67%) of the anchor allotment. Other investors included HDFC Mutual Fund which subscribed about 12%, Society Générale, Morgan Stanley, Jupiter India Fund, Max Life Insurance, IIFL Special Opportunity Fund, IDFC NSE 2.61 % Mutual Fund, Dovetail India Fund etc.

About Heranba Industries Limited

  • Heranba Industries Limited is a leading crop protection chemical manufacturer, exporter and marketing company based out of Vapi, Gujarat, with Corporate and Administration Offices in Mumbai.
  • It manufactures Intermediates, Technicals and Formulations.
  • Heranba Industries Limited is one of the leading domestic producers of synthetic pyrethroids like cypermethrin, alphacypermethrin, deltamethrin, permitherin, lambda cyhalothrin etc.
  • Its Pesticides range includes insecticides, herbicides, fungicides and public health products for pest control.
  • Heranba Industries Limited business verticals include:
    • Domestic Institutional; sales of Technicals: Manufacturing and selling of Technicals in bulk to domestic companies;
    • Technicals Exports: Exports of Technicals in bulk to customers outside India
    • Branded Formulations: Manufacturing and selling of Formulations under their own brands through their own distribution network in India;
    • Formulations Exports: Export of Formulations in bulk and customer specified packaging outside India
    • Public Health: Manufacturing and selling of general insect control chemicals by participating in public health tenders issued by governmental authorities and selling to pest management companies.
  • The company has 3 manufacturing and packaging facilities in and around the industrial belt of Vapi, with an aggregate manufacturing capacity of 14,024 MTPA.
  • Heranba has an extensive distribution network in India supported by a skilled sales force. It has more than 9,400 dealers having access to 21 depots of the company across 16 states and 1 union territory in India supporting the distribution of their products.
  • The company participated in various international & domestic agrochemical exhibitions and industry conferences to market their products.

Heranba Industries IPO: Financials

 Rs. CrH1Fy21H1FY19FY20FY19FY18
Revenue from Operations618.34501.65951.371,004.44745.1
Revenue Growth (%)23.26%-5.28%34.81%
EBITDA 100.1476.3145.88138.8193.13
EBITDA (%)16.20%15.21%15.33%13.82%12.50%
Profit Before Tax90.0868.87128.84122.1276.31
Net Profit 66.3153.2497.7575.446.88
Net Profit (% )10.72%10.61%10.21%7.51%6.29%
Equity Share Capital~39.0639.0639.0639.067.81
Reserves as stated~342.2237.04281.79189.12149.51
Net worth as stated381.26276.1320.85228.18157.32
RoNW (%)17.39^19.28%^30.4733.0529.8
NAV(₹ )~97.6270.6982.1558.4240.29
Face Value10
EPS –Basic (₹ ) as stated16.9813.6325.0319.3112
Equity Post IPO40.01
IPO Price627
EPS (Post IPO) FY2024.43
PE 25.66
EPS ann on sep’2133.15
PE  ann Set ’2118.92
Market Cap2509
Market Cap  /  Sales2.6


  • Heranba Industries is one of the leading manufacturers of synthetic pyrethroids in India, having a market share of 19.5 per cent of the total Indian pyrethroids production values. It manufactures intermediates, technicals and formulations and also exports to more than 60 countries.
  • Strong product portfolio and wide distribution network. Heranba Industries manufactures and supplies Technicals to leading domestic and multinational agrochemical companies which are then are used by them for manufacturing their own products The agrochemical company has three manufacturing plants.
  • Diversified and stable customer base with various domestic and multinational agrochemical companies are company’s customers for the Technicals manufactured by the company.
  • Extensive distribution network for better brand penetration with over 9,400 dealers.
  • Experienced Promoters and Management Team, with promoters having more than 30 years of experience in the agrochemicals sector.


  • The company’s business is working capital intensive
  • Raw material constitutes a large portion of expenses.
  • operations are subject to environmental and workers’ health and safety laws and regulations.
  • Trade dependence on China.

Heranba Industries IPO: Assessment

  • Indian Pyrethroids market grew at CAGR of ~ 7.4% over the period FY14-FY19 . It is further expected to grow at a CAGR of ~ 8.5% during the period FY20-25E.
  • Heranba Industries Limited is a dominant player in Pyrethroids market having a market share of 19.5 per cent. .
  • The company exported their products to more than 60 countries in Latin America, CIS, Middle East, Africa, Asia and South East Asia in Fiscal 2020.
  • Heranba Industries Limited has substantial exports to China but overall has a widely distributed customer base.
  • In 2019 company’s long term rating by CRISIL was upgraded to A-/Stable (upgraded from CRISIL BBB+/ Positive)
  • Presently its 3 plants around VAPI are operating with average capacity utilization of ~80% in FY20.
  • Heranba Industries plans to enter the regulated markets of USA & Europe, which can enhance its margins.
  • For FY20, Heranba Industries reported a 29.6 % increase in profit at Rs 97.75 crore over the last fiscal. evenue from operations, however, lower by 5.3% YOY to Rs 951.37 crore in FY20.
  • From Fy 18-20, revenue grew ~13%, while PAT grew at a CAGR of 44%.
  • Heranba Industries Limited IPO is being offered at P/E of 18.9x (annualized FY21E EPS of Rs.33.2). This looks reasonable when compared to its peers.
Company/RatioFVCMPSalesEPS TTMPE
Heranba Industries1062795133.1518.91
Sumitomo Chemicals1029925526.2947.54
Rallis India Limited1256230411.3722.52
Bharat Rasayan Limited109754109336127.02
  • It may be noted that the company is more of a generic agrochemical manufacturer which sells its products (technicals and formulations) to big B2B players and distributors, which then sell these to the farmers.
  • Further there have been several corporate governance lapses by the company in the past and number of litigation cases against the company is rather on the higher side. There are also cases related to violations of the environment laws, insecticides act and the evasion of income tax.
  • I intend to apply in Heranba Industries IPO. Despite some non compliances in recent past, Heranba Industries IPO may be well placed to fetch some listing gain and /or as a scrip for short/medium term investment.

Standard disclaimer:  I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2)  Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors.  I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or  leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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