What you must know about the Nirman Agri Genetics IPO

About Nirman Agri Genetics IPO
Things to know about Nirman Agri Genetics IPO

by 5paisa Research Team Last Updated: Mar 09, 2023 - 05:50 pm 2k Views
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Nirman Agri Genetics IPO, is an SME IPO on the NSE which is opening for subscription on 15th March 2023. The company was incorporated in the year 2020 as a specialized agri-input company with a focus on hybrid seeds and crop output enhancing systems. Nirman Agri Genetics Ltd is into the production, processing, and marketing of high-quality hybrid seeds, pesticides, and bio-organic products. The company’s products find application in different cash crops including corn, sunflower, cotton, paddy, grain sorghum, etc.

In recent times, Nirman Agri Genetics Ltd has also forayed into micronutrients and bioproducts. Apart from hybrid seeds, the company also produces non-hybrid seeds for paddy (rice cultivation). It operates through its production (in-house and outsourced) processing and R&D facilities located at Nashik and Nimgul in the state of Maharashtra; apart from presence in the states of Gujarat, and Madhya Pradesh. Nirman Agri Genetics Ltd endeavours to become a major crop solutions provider for farmers. This includes the supply of high-yielding hybrid seeds and crop management via micronutrients and by-products. The company is an existing profit-making company and it will be making use of these fresh funds for meeting working capital needs as well as organic and inorganic growth; apart from JVs.

Key terms of the Nirman Agri Genetics SME IPO

Here are some of the highlights of the Nirman Agri Genetics Ltd IPO on the SME segment of the National Stock Exchange (NSE).

  • The issue opens for subscription on 15th March 2023 and closes for subscription on 20th March 2023; both days inclusive.
     

  • The company has a face value of Rs10 per share and the issue price for the fresh issue portion has a fixed price of Rs99 per share.
     

  • The company will issue a total of 20.508 lakh shares at the price of Rs99 per share aggregating to a total fund raising of Rs20.30 crore.
     

  • The company has allocated 50% of the issue size for the retail investor while the balance 50% is allocated to HNI / NII investors.
     

  • The minimum lot size for the IPO investment will be 1,200 shares. Thus, retail investors can invest a minimum of Rs118,800 (1,200 x Rs99 per share) in the IPO. That is also the maximum that the retail investors can invest in the IPO.
     

  • HNI / NII investors can invest a minimum of 2 lots comprising of 2,400 shares and having a minimum lot value of Rs237,600. There is no upper limit on what the HNI / NII investors can apply for.
     

  • Like every SME IPO, this issue also has a market making portion with a market maker portion allocation of 104,400 shares. Rikhav Securities will act as the market maker to the issue providing two-way quotes to ensure liquidity on the counter.
     

  • The company has been promoted by Pranav Kailash Bagal and the promoter stake in the company stands currently at 99.99%. Post the IPO, being a fresh issue of shares, the promoter stake will be get diluted to 65.59%.

While First Overseas Capital Ltd will also be the lead manager to the issue, Bigshare Services Private Limited will be the registrar to the issue.

Key dates to be aware of in the Nirman Agri Genetics IPO (SME)

The SME IPO of Nirman Agri Genetics Ltd IPO opens on Wednesday, March 15th, 2023 and closes on Monday March 20th, 2023. The Nirman Agri Genetics Ltd IPO bid date is from March 15th, 2023 10.00 AM to March 20th, 2023 5.00 PM. The Cut-off time for UPI Mandate confirmation is 5 PM on the issue closing day; which is the 20th of March 2023.

Event

Tentative Date

IPO Opening Date

March 15th, 2023

IPO Closing Date

March 20th, 2023

Finalization of Basis of Allotment

March 23rd, 2023

Initiation of Refunds to non-allottees

March 24th, 2023

Credit of Shares to Demat account of eligible investors

March 27th, 2023

Date of listing on the NSE-SME IPO segment

March 28th, 2023

It must be noted that in ASBA applications, there is no refund concept. The total application amount is blocked under the ASBA (applications supported by blocked amounts) system. Once the allotment is finalized, only the amount is debited to the extent of the allotment made and the lien on the balance amount is automatically released in the bank account.

Financial highlights of Nirman Agri Genetics IPO

The table below captures the key financials of Nirman Agri Genetics Ltd for the last 3 completed financial years. The flow figures like sales and profits for FY23 are only available for 7 months, so they have been annualized for being able to compare with the previous two years data.

Details

FY23

FY22

FY21

Total Revenues

Rs30.93 cr

Rs13.49 cr

Rs3.82 cr

Revenue growth

129.28%

253.14%

N.A.

Profit after tax (PAT)

Rs3.95 cr

Rs2.56 cr

Rs0.06 cr

PAT margins (%)

12.77%

18.98%

1.57%

Net Worth

Rs4.48 cr

Rs2.64 cr

Rs0.07 cr

Return on Net Worth (%)

88.17%

96.97%

85.71%

Asset Turnover Ratio (X)

1.97X

2.26X

2.33X

Data Source: Company DRHP filed with SEBI

Here are some key takeaways from the financials. Firstly, the revenue growth may look inflated as the company is less than 3 years old and the growth is quite high at this point in time as the model is still developing. PAT and RONW margins are attractive, but they also need to mature. However, asset turnover does indicate at adequate sweating of assets.

The agri inputs business is not only dependent on the monsoon cycles but also on other factors like rural inflation, which has not been too favourable in recent times. The business is still largely regulated and that would remain an overhang on the valuations assigned to the company in the future. But, more importantly, this is a high growth sector where there is a lot of potential, especially with the government putting a major thrust on the agricultural sector. The IPO is certainly risky, but offers a good trade-off for investors with a higher investment risk appetite.

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