India Pesticides IPO subscribed 3.79 times on Day 2

The price band of the offer has been fixed at Rs290 to Rs296 per equity share. Photo: iStock

2 min read . Updated: 24 Jun 2021, 06:50 PM IST Ashwin Ramarathinam

The offer received bids for 73.14 million equity shares against the IPO size of over 19.31 million equity shares, the subscription data available on the exchanges showed

The Rs800 crore initial public offer of India Pesticides Ltd was subscribed 3.79 times on the second day of bidding on the back of overwhelming response from retail investors.

The offer received bids for 73.14 million equity shares against the IPO size of over 19.31 million equity shares, the subscription data available on the exchanges showed.

The reserved portion of retail investors saw 5.87 times subscription, while non-institutional investors portion was subscribed 91% and qualified institutional buyers portion was subscribed 2.31 times.

Analysts at Angel Broking in an IPO note said “Based on FY-2021 price to equity of 24.5 times and enterprise value to earnings before interest tax depreciation and amortization of 18.2 times at upper band of the IPO price, which is slightly better than the peers companies. Similarly company having one of the best return on equity and return on capital employed of 34% and 45% respectively. Company having a very healthy balance sheet with negative net debt to equity and expect the upcoming expansion plan and higher capacity utilisation will be the growth drivers for the company in future".

The total offer size of ₹800 crore comprises a fresh issue of ₹100 crore and an offer for sale of ₹700 crore by the selling shareholders. The offer for sale consists of ₹281.4 crore worth of shares by promoter Anand Swarup Agarwal, and ₹418.6 crore by other selling shareholders.

The company will utilize fresh issue proceeds for its working capital requirements and general corporate purposes.

The Price band of the offer has been fixed at ₹290 to ₹296 per equity share. Bids can be made for a minimum of 50 equity shares and in multiples of 50 equity shares thereafter.

India Pesticides is one of the leading agrochemicals firms in the country, currently operates 2 manufacturing facilities out of the Lucknow and Hardoi in Uttar Pradesh.

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Axis Capital Ltd and JM Financial Ltd are the book running lead managers to the offer.

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