Indogulf Cropsciences IPO Lists Flat at ₹111 Despite Strong Investor Response

resr 5paisa Research Team

Last Updated: 3rd July 2025 - 11:17 am

3 min read

The crop protection and plant nutrients manufacturer, Indogulf Cropsciences Limited, made a flat debut on both BSE and NSE platforms on July 3, 2025. After closing its IPO bidding between June 26 - June 30, 2025, the company commenced trading exactly at its issue price before declining marginally, reflecting cautious market sentiment towards the agrochemicals sector despite strong subscription levels. 

Indogulf Cropsciences Listing Details

Indogulf Cropsciences Limited launched its IPO at ₹111 per share with a minimum investment of 135 shares costing ₹14,985. The IPO received a strong response with a subscription of 27.17 times - NII segment leading at a remarkable 49.06 times, QIB at 31.73 times, and retail at 14.97 times, demonstrating solid investor enthusiasm across categories. 

Listing Price: The Indogulf Cropsciences share price opened at ₹111 on both BSE and NSE on July 3, 2025, exactly matching the issue price before declining to ₹110.5, substantially underperforming grey market expectations of ₹129.

First-Day Trading Performance Outlook

Indogulf Cropsciences experienced a disappointing debut performance, listing flat at the issue price despite a strong subscription response, significantly underperforming grey market expectations, which had indicated a 16.2% premium. The company, incorporated in 1993, manufactures crop protection products, plant nutrients, and biologicals across four facilities in Jammu & Kashmir and Haryana, serving 22 states through 5,772 distributors and maintaining an international presence in 34 countries with 640 permanent employees.

Growth Drivers and Challenges

Growth Drivers:

  • Diversified Product Portfolio: Comprehensive offerings across crop protection products, plant nutrients, and biologicals, including speciality fertilisers, insecticides, fungicides, and bio-stimulants
  • Extensive Distribution Network: Strong sales network across 22 states and 3 Union Territories with 5,772 distributors domestically and presence in 34 countries internationally
  • Manufacturing Infrastructure: Four backwards-integrated facilities covering twenty acres with multi-purpose capabilities enabling diverse product manufacturing and customer adaptability
  • Innovation Leadership: First indigenous manufacturer of Pyrazosulfuron Ethyl technical with 97% purity and pioneer in Spiromesifen technical with 96.5% purity

 

Challenges:

  • Flat Listing Performance: Opening at issue price despite strong subscription indicates market concerns about valuation and growth prospects
  • Revenue Stagnation: Static revenue performance in FY23-24 attributed to volatile raw material prices affecting operational efficiency and profitability
  • Grey Market Underperformance: Significant gap between grey market expectations (₹129) and actual listing (₹111), reflecting market disappointment
  • Fully Priced Valuation: Post-issue P/E of 24.27 suggests premium pricing concerns despite subscription success

 

Utilisation of IPO Proceeds

  • Working Capital: ₹65.00 crore for funding working capital requirements to support manufacturing operations and business expansion
  • Debt Repayment: ₹34.12 crore for repayment of outstanding borrowings to improve capital structure and reduce financial leverage
  • Capacity Expansion: ₹14.00 crore for capital expenditure towards setting up an in-house dry flowable plant at Barwasni, Haryana
  • General Corporate Purposes: Remaining funds for strategic initiatives and operational requirements
     

Financial Performance of Indogulf Cropsciences

Revenue: ₹466.31 crore for 9M FY25, showing decline from ₹555.79 crore in FY24, reflecting challenging market conditions and raw material price volatility.

Net Profit: ₹21.68 crore in 9M FY25, representing decline from ₹28.23 crore in FY24, indicating margin pressure from operational challenges.

Financial Metrics: Moderate ROE of 12.2%, ROCE of 11.93%, reasonable debt-to-equity of 0.67, PAT margin of 5.11%, EBITDA margin of 10.09%, and conservative price-to-book value of 1.13

Indogulf Cropsciences' flat listing performance despite a strong subscription response reflects cautious market sentiment towards agrochemical companies facing revenue volatility and pricing pressures. Whilst the company demonstrates potential through its diversified product portfolio, extensive distribution network, and manufacturing capabilities, concerns over recent revenue stagnation and premium valuation resulted in disappointing debut performance, highlighting the importance of operational improvements and market positioning in the competitive agrochemicals sector.

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