India Pesticides IPO plans to raise Rs 800 crore through the public listing of shares. The issue comprises a fresh issue of Rs 100 crore and an offer for sale (OFS) of Rs 281.40 crore by Anand Swarup Agrawal and Rs 418.60 crore by other shareholders and promoters. The price band for India Pesticides IPO has been fixed at Rs 290-296 per share of the face value of Rs 1.

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India Pesticides IPO Details:

Issue size ( Rs. Cr.)Issue of Equity Shares aggregating up to ₹ 800 Cr
(Fresh Issue  up to ₹ 100 Crore and OFS up to ₹ 700 Crore)
No. of shares:27,586,206 – 27,027,026
Face value₹ 1/-
Price band ₹ 290 – 296
Bid Lot50 Shares and in multiple thereof
Issue Structure 
QIB 50%
NIB15%
Retail35% – !80 Cr- 9459460 shares
Appls needed for 1x retail~1.89  Lac

Updates & Indicative Time Table:

  • ANCHOR ISSUE: IPO bound India Pesticides raised about Rs 240 crore from 12 anchor investors. The six foreign portfolio investors include Abu Dhabi Investment Authority , Wells Fargo, Plutus, Millenium, Tara and BNP Paribas. The domestic investors include SBI Mutual Fund and Nippon Mutual Fund with 27.08% and 16.67% allocation. Other domestic institutions were Tata Mutual Fund, Bajaj Allianz Life Insurance Company, Bharti AXA Life Insurance Company, and Winro Commercial India.

About India Pesticides

  • India Pesticides (IPL) was incorporated in 1984 and is one of the leading agrochemicals manufacturers in India.
  • India Pesticides is diversified into manufacturing herbicide and fungicide Technicals and active pharmaceutical ingredients (APIs). It also manufactures herbicide, insecticide and fungicide Formulations. It manufactures generic Technicals that are used in the manufacturing of fungicides and herbicides as well as APIs with applications in dermatological products.
  • Major fungicide Technicals that India Pesticides manufactures include (i) Folpet, used to manufacture fungicides that control fungal growth at vineyards, cereals, crops and biocide in paints(ii) Cymoxanil, used to manufacture fungicides that control downy mildews of grapes, potatoes, vegetables and several other crops.
  • Major herbicide Technicals that the company manufactures include Thiocarbamate herbicides that have application in field crops, such as, wheat and rice, and are used globally.
  • The APIs it manufactures have anti-scabies and anti-fungal applications.
  • India Pesticides also manufactures and sells various formulations of insecticides, fungicide and herbicides, growth regulators and Acaricides, which are ready-to-use products.
  • The company is manufacturing herbicide, fungicide Technicals and active pharmaceutical ingredients (APIs). It also manufactures herbicide, insecticide and fungicide Formulations. India Pesticides manufactures generic Technicals that are used in the manufacturing of fungicides and herbicides as well as APIs with applications in dermatological products.
  • It operates from two manufacturing facilities at Lucknow and Hardoi in Uttar Pradesh with a capacity of 19,500 MT for technicals and 6,500 MT for the formulations.
  • India Pesticides Limited has registrations and licences for 22 agrochemicals technical and 124 formulations for sale in India, and also for 27 agrochemicals technical and 34 formulations for exports.
Another IPO on the way ⁠— this pesticides maker from Lucknow is looking to  raise ₹800 crore | Business Insider India

India Pesticides IPO: Financials

Item /  (₹ In Cr)FY21FY20FY19
Revenue from Operations648.95479.63340.69
Revenue Growth (%)35.30%40.78%
EBITDA 189.52103.6670.63
EBITDA (%) 29.20%21.61%20.73%
Profit Before Tax179.9593.3761.1
Net Profit134.5370.843.92
Net Profit (% )20.53%14.46%12.69%
Equity Share Capital11.183.183.18
Reserves 378.32253.66183.84
Net worth 389.5256.84187.02
RoNW (%)34.54%27.57%23.48%
NAV(₹ )34.9423.0516.79
Return on Equity (%)34.63%27.48%23.46%
ROCE (%)45.18%35.82%32.33%
EPS (₹ )12.076.353.94
FV1
Equity Post IPO11.52
IPO Price296
EPS (Post IPO) FY2111.68
PE 25.34
Market Cap3409
Market Cap  /  Sales5.3

Pros

  • Among the top 5 global players of Folpet, Thiocarbamate, and Herbicide Technicals.
  • Diversified product portfolio with specialized products.
  • Market presence in both domestic and international markets.
  • Consistent track record of financial performance.
  • Strong Research & Development.

Cons

  • Business is working capital intensive.
  • Agro-chemicals business is subject to climatic conditions, the overall area under cultivation and the cropping pattern adopted by the farming community. Seasonal variations and unfavorable local and global weather patterns.
  • Growing consumption of bio-pesticides globally and in India may affect company’s business.

India Pesticides IPO: Assessment

  • India is currently the fourth-largest producer of crop protection chemicals in the world and has emerged as an export hub for the crop protection chemicals manufacturing as MNCs across the globe take advantage advantage of cost-effective manufacturing in the country.
  • India Pesticides clocked revenue of Rs 655.37 crore in FY21 compared to Rs 346.04 crore in FY18. Whereas its profit after tax grew to Rs 134.53 crore versus Rs 43.92 crore during the same period.
  • Revenue generated from exports contributed to 56.7% of the company’s revenue from operations in FY 2021.
  • India Pesticides derives 78% of its revenue from agro chemical technicals and 22% from formulations. The compnay exports 60% of the products to crop protection firms like Sygenta, UPL, BASF in Australia, Europe and Asia.
  • Commercialisation of 3 technicals accounted for 40% of India Pesticides FY21 revenue.
  • India Pesticides plans to focus on technicals which are going off-patent.
  • The company’s efforts are led by a dedicated R&D team that comprises PhDs, masters graduate in chemistry and biotechnological engineer.
  • India Pesticides has developed strong and long-term relationships with various multinational corporations that has helped it to expand its product offerings and geographic reach. Accordingly, we are dependent on our
  • arrangements with such multinational corporations and have been associated with many clients for over 10 years.
SNo.CompanyCMP Rs.P/E Sales Rs.Cr.PAT 12M Rs.Cr.NPM %Sales Var 3Yrs %Profit Var 3Yrs %Mar Cap Rs.Cr.Mcap/sales
1UPL 80320.33869430287.8%30.613.3613151.6
2P I Industries 278957.3457773816.1%26.226.9423199.2
3Sumitomo Chemi. 39457.0264334513.1%11.433.5196717.4
4Rallis India 34031.024292138.8%10.78.366032.7
5Bharat Rasayan 1286335.4109315414.1%25.243.054675.0
6Dhanuka Agritech 94821.0138721115.2%13.018.744143.2
7Sharda Cropchem 35614.023962299.6%12.05.432071.3
8Heranba Inds 70918.4121915412.7%18.048.728352.3
9India Pesticides29625.364913520.7%0.20.534095.3
  • India Pesticides IPO was last reported to be commanding a GMP of Rs. 30 which is considerably low than what it commanded a week back.
  • I intend to apply in India Pesticides IPO as the agrochemicals sector is growing well and Indian companies stand to benefit from China +1 factor. While there are many good agrochemical companies which may reduced attractiveness of India Pesticides IPO, comfort can be drawn from planned capacity addition, good margins, debt free status and good R&D base.

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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