The IPO of agrochemical company Heranba Industries, which opened on Tuesday, was nearly 6.3 times subscribed on February 25.
As the final day of bidding, it received bids for 4.4 crore equity shares against an offer size of 69.81 lakh equity shares.
Moreover, the company has a strong 19.5% market share in the pyrethroids market and exports to over 60 countries.
It has fixed a price band of Rs.626-627 per share with 35% of IPO issue reserved for the retail category.
Heranba’s revenues grew at a CAGR of 13 per cent from FY18-FY20 as per it’s financial statements. Meanwhile it’s PAT grew at a CAGR of 44 per cent during the same period.
The Gujarat based company plans to raise Rs 625.2 crore through the public issue. This includes a fresh issue of Rs 60 crore and an offer for sale of Rs 565.2 crore from promoters.
It aims to employ fresh issue proceeds for its working capital requirements whereas offer for sale money goes to promoters.
However, retail investors had bid 6.58 times more against the portion reserved for them. The company further claimed to decline shareholding of promoters to 74 percent from 98.8 percent.
Also, it has reduced debt on its books and trades at a reasonable valuation multiple of 25 times P/E.
Rallis India, Bharat Rasayan and Sumitomo Chemical are some of the biggest competitors of the company.
In fact, it has presence in a wide range of products across the entire value chain of synthetic pyrethroids. The market share of such products is of 20 per cent at present.
A distribution network of more than 9,600 dealers spread across 16 states and 1 union territory facilities it.
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