India Pesticides shares list at 21% premium to IPO price; bullish market momentum helps strong debut

India Pesticides IPO was a mix of an offer for sale (OFS) worth Rs 700 crore and a fresh issue of equity shares worth Rs 100 crore. (Image: REUTERS)

India Pesticides Limited made a stellar debut on the stock exchanges today, as domestic markets surged higher amid bullish market momentum. Shares of the agrochemical firm listed at Rs 360 per share, up 21.62% or Rs 64 from the issue price of Rs 296 per share. India Pesticides Limited (IPL) is a research-driven agrochemical manufacturer of Technicals with a growing Formulations business. It is one of the fastest-growing agrochemicals companies in terms of volume of Technicals manufactured. The company had a market capitalization of Rs 4,100 crore as shares began trading for the first time. 

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The initial public offering (IPO) of India Pesticides was subscribed 29 times overall last month. Retail investors bid for 11.3 times the portion reserved for them while non-institutional investors (NII)bid for 51 times the reserved quota. Qualified institutional buyers (QIB) bid for the IPO 42 times. With all three portions oversubscribed, the demand for the public issue was high. Investors were eligible to bid for shares in multiples of 50 equity shares of face value Re 1 per share. At the upper end of the price band, this translated to a minimum investment of Rs 14,800.

India Pesticides IPO was a mix of an offer for sale (OFS) worth Rs 700 crore and a fresh issue of equity shares worth Rs 100 crore. Post issue the promoter shareholding in the company will drop to 59.7% from 82.7%. The public shareholding will increase to 40.3% from 17.3% pre-IPO, according to HDFC Securities. 

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“We like IPL given its presence in the fast-growing agrochemical space, diversified product portfolio and robust financials,” domestic brokerage and research firm Motilal Oswal said in an IPO note. They added that strong R&D, long term relations with MNCs, cost competitiveness and extensive distribution network are some of the other key positives for India Pesticides. Motilal Oswal found the IPO to be “reasonably valued” at 25.3x FY21 P/E on a post issue basis, when compared to peers and had a “subscribe” rating on the IPO. India Pesticides will join peers such as UPL, PI Industries, Sumitomo Chemicals, Rallis, and Dhanuka Agritech on the stock exchanges.