Paradeep Phosphates IPO - 7 Things to Know
Paradeep Phosphates Ltd, a leading joint venture fertilizer company in India that has already secured SEBI approval for its IPO in September 2021. However, the company is yet to announce the dates of its IPO.
Normally, the IPO is issued within a month of the SEBI issuance of observations, which is equivalent to SEBI approval. In this case, Paradeep Phosphates Ltd has been waiting for an opportune moment and also wants the LIC IPO to be out of the way before it taps the IPO markets.
7 Interesting Facts to Know About Paradeep Phosphates
1) Paradeep Phosphates Ltd had filed DRHP and also secured SEBI approval for its proposed Paradeep Phosphates IPO which will be a combination of fresh issue and an offer for sale. The Fresh issue portion will comprise of fresh issue of shares and fund infusion to the tune of Rs.1,255 crore. The OFS will see the offer of over 12 crore shares by the existing holders.
2) Paradeep Phosphates Ltd is a joint venture between Zuari Maroc Phosphates Ltd (ZMPPL) and the Government of India. In terms of the current capital structure of Paradeep Phosphates Ltd, Zuari Maroc Phosphates owns 80.45% stake in the company while the balance 19.55% is owned by the Government of India.
3) Both the principal shareholders of Paradeep Phosphates Ltd; i.e. Zuari Maroc Phosphates Ltd and the Government of India will participate in the OFS of the company Out of the total OFS of 12,00,35,800 shares on offer, Zuari Maroc Phosphates will offer 75,46,800 shares while the Government of India will offer 11,24,89,000 shares in the OFS.
The final size of the OFS and the overall size of the issue will depend on the final price band that is arrived at for the proposed IPO.
4) Paradeep Phosphates is primarily engaged in the manufacturing and trading of a variety of fertilizers that include the DAP fertilizers and the NPK fertilizers. DAP fertilizers refer to the Di-ammonium Phosphate fertilizers while the NPK fertilizers refer to the mix of Nitrogenous, Phosphatic and Potassic fertilizers in the overall portfolio.
5) The expansion of domestic manufacture of fertilizers has been a key challenge as the prices of fertilizers have been growing sharply in the last one year due to a sharp rise in the cost of inputs. India still substantially imports fertilizers as it needs to provide subsidized fertilizers to vast tracts across India as part of its commitment to farmers. Higher domestic production at lower cost will reduce the forex outflow and also the government subsidy bill.
6) For the government of India this offers them monetization of stake and also a boost to the disinvestment revenues. However, the fresh issue component of Rs.1,255 crore will be used for defraying debt and for expansion of the existing facilities to enhance production and to also tweak its NPK mix more favourably. Final dates for the IPO are still awaited.
7) The IPO of Paradeep Phosphates Ltd will be lead managed by Axis Capital, ICICI Securities, JM Financial and SBI Capital Markets. They will act as the book running lead managers or BRLMs to the issue.
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