India Pesticides Limited IPO - Information Note

India Pesticides IPO
IPO
by Nikita Bhoota 23/06/2021

India Pesticides limited IPO Details

Issue Opens - June 23, 2021

Issue Closes - June 25, 2021

Price Band -  ₹ 290 - 296

Face Value -  ₹1

Issue Size - ~₹800 cr

Bid Lot - 50 Equity Shares

Issue Type - 100% Book building

Company Background

India Pesticides Limited is one of the fastest growing agro-chemicals company in terms of volume of Technicals manufactured. The company is the sole Indian manufacturer of five Technicals and among the leading manufacturers globally for Captan, Folpet and Thiocarbamate Herbicide in terms of production capacity. They have diversified into manufacturing herbicide and fungicide Technicals and active pharmaceutical ingredients. The company also manufactures herbicide, insecticide and fungicide formulations. Technicals are exported to over 25 countries including Australia and other countries in North and South America, Europe, Asia and Africa. The company’s formulations products are primarily sold domestically through their extensive network of dealers and distributors.

Object of the Offer

The IPO offer comprises of a fresh issue and an offer for sale. Out of the fresh Issue of INR 100cr, INR 80cr is proposed to be utilized for working capital requirement of the company and the balance INR 20cr is to be used for general corporate purposes. The balance i.e. INR 700cr of the issue would be through offer for sale by the shareholders and proceeds would go to such selling shareholders.

Financials of India Pesticides Limited

Particulars (Rs million)

FY19

FY20

9MFY21

Revenue from Operations

3,406.88

4,796.27

6,489.54

EBITDA

706.34

1036.56

1894.91

EBITDA Margin (%)

20.73

21.61

29.20

PAT

438.71

705.85

1348.89

PAT Margin (%)

12.68

14.41

20.58

EPS

3.94

6.35

12.07

ROCE (%)

32.33

35.82

45.18

ROE (%)

23.46

27.48

34.63

Net Debt to Equity (x)

0.09

0.06

0.02


Company Strengths

Strong R&D and Product Development CapabilitiesCompetitive Strengths:

India Pesticides Limited has substantial experience in undertaking R&D activities as part of their manufacturing operations. Their R&D places significant emphasis on identification of appropriate complex Technicals that are suitable for commercialization, improving their production processes and the quality of their present products, and manufacturing new off-patent products. Their R&D plays a big role in identifying products that give higher margin and require specialized manufacturing and handling capabilities.

Long-term relationship with key customers

India Pesticides Limited has developed strong and long-term relationships with various multinational corporations that has helped it expand its product offerings and geographic reach for its Technicals business. Several of the company’s customers have been associated with the Company for over 10 years. Company’s major customers include multinational corporations, and hence, 56.71% of its revenue was generated from exports.

Diversified portfolio of niche and quality specialized products

The company has diversified its product portfolio over the years and has grown into a multi-product manufacturer of Formulations, herbicide and fungicide Technicals as well as APIs. The company is the sole Indian manufacturer and among top five globally for several Technicals including, Thiocarbamate herbicide and Folpet. They have obtained registrations from the CIBRC for 22 agro-chemical Technicals and 125 Formulations for sale in India and 27 agro-chemical Technicals and 34 Formulations for export. They also have a license to manufacture from the Department of Agriculture, Uttar Pradesh for 49 agro-chemical Technicals and 158 Formulations.

Key Risk Factor:

  • The top 10 customers constitute a significant portion of the company’s revenue and represent 56.83% of the revenue generated. The loss of one or more such customers could adversely affect business.
  • Increasing use of alternative pest management and crop protection measures such as bio technology products, pest resistant seeds or genetically modified crops may reduce demand for the company’s products and adversely affect business.
  • The availability of counterfeit products passed off by others as their products, could adversely affect the company’s reputation, goodwill and results of operations..

* For complete list of risk factors kindly refer to the Red Herring Prospectus.

See Detail video of India Pesticides Limited IPO :

About 5paisa:- 5paisa is an online discount stock broker that is a member of NSE, BSE, MCX and MCX-SX. Since its inception in 2016, 5paisa has always promoted the idea of self-investment and has ensured that 100% operations are executed digitally with minimal to no human interventions. 

Our all-in-one Demat account makes investment hassle free for everyone, be it an individual newly venturing into the investment market or a pro investor. Headquartered in Mumbai, 5paisa.com - a subsidiary of IIFL Holdings Ltd (formerly India Infoline Limited), is the first Indian public listed fintech company.

Aticles to read next