Mumbai:
Agri-input company KPR Agrochem’s initial public offer (
IPO) to raise up to Rs 283.20 crore is set to open on Friday.
The offer consists of a fresh issue of up to Rs 210 crore, and an offer for sale of up to Rs 73.2 crore, with the equity shares priced in the band of Rs 59-61 per share.
The earliest closing date of the issue is July 2.
The QIB (qualified institutional investors) category will be up to 25 per cent, non-institutional investors category will be not less than 35 per cent and the retail portion will be not less than 40 per cent.
Further, the IPO also has a reservation of up to 430,000 equity shares for eligible employees. Equity shares in the IPO are offered at a discount of Rs 3 per equity share to the retail and eligible employee category.
The Book Running Lead Manager to the Issue is PL Capital Markets.
India Mart IPO: All you need to know
About the company
22 Jun, 2019
IndiaMART is the country's largest online B2B marketplace for business products and services. According to the company’s DRHP, it had a market share of around 60 per cent in the online B2B classified space in India in FY17.
This platform is mainly for business buyersto discover products, services and contact details of suppliers. Its suppliers include Indian SMEs as well as large businesses, who are manufactures, wholesales, exporters and retailers.
IndiaMART had an aggregate 723.5 million visits in FY2019, of which 550.3 million comprised mobile traffic at 76 per cent of the total.
As of March 31, 2019, the company had 82.70 million registered buyers and 5.55 million supplier storefronts in India. These storefronts had listed 60.73 million products, of which 76 per cent comprised products and 24 per cent services.
Financial Health
22 Jun, 2019
Despite reporting a robust top-line growth, IndiaMART’s short financial history is not very encouraging.
> The company reported a 26.4 per cent CAGR growth in consolidated operating revenue over FY17-19.
> The company reported EBITDA losses in FY17 and FY18. Despite having non-cash expenses, it had an EBITDA profit in FY19, mainly due to improved productivity.
> Due to deferred tax credit, it reported a PAT of Rs 5,476 lakh and Rs 2004 lakh in FY18 and FY19 respectively, with a profit margin of 13.3 per cent and 4 per cent.
> Baring FY17, cash flow from operations was positive over FY17-19, with an average operating cash flow of Rs. 21,710 lakh (over FY18-19).
> RoE for FY19 was 12.5 per cent, while RoCE was 3.2 per cent.
Choice Broking expects the company to post 23.9 per cent revenue growth in FY20E at Rs 62,861 lakh. EBITDA and PAT margins are expected at 15.2 per cent and 12.7 per cent, respectively, in FY20E against 3.4 per cent and 4 per cent in FY19.
Comparison with peers
22 Jun, 2019
The company does not have any listed peer in India. TradeIndia, Exporters India, Alibaba India and JD Business, are some of its unlisted competitors. Just Dial, Google and other search engines, B2B transaction-based platforms such as Industry Buying Power2SME, Moglix sand Bizongo are some of its indirect competitors.
Key strengths
22 Jun, 2019
> One of the leading B2B e-commerce players in India
> Expected growth in SMEs to significantly benefit IndiaMART
> Well-placed to cash in the opportunities in India’s wholesale market
Key risks
22 Jun, 2019
> Subdued economic expansion
> Inability to maintain the traffic of buyers and suppliers
> Difficulty in retaining and expanding the paying suppliers
> Poor acceptance of other fee based services
> Competition
Andhra Pradesh-based KPR Agrochem is an agri-input company focused on manufacturing, distribution and retailing of a wide range of crop yield enhancing and protection products.
The company's products range from seeds to crop nutrients products to crop protection products and also veterinary feed supplements.
Further, in order to secure the supply of sulphuric acid, one of the key ingredients for the company’s various products, the company also ventured into manufacturing of sulphuric acid. It also produces other sulphuric acid-based chemicals like Labsa and Oleum that have wider applications across industries like agrochemicals, veterinary feed supplements, pharmaceuticals, synthetic detergents.
KPR Agrochem received clearance from the
Sebi on April 5.