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Heranba IPO closes on February 25. (Photo source: heranba.co.in)
Heranba IPO closes on February 25. (Photo source: heranba.co.in)

Heranba Industries IPO subscribed 82% on Day 1

  • The public issue has received bids for 58.78 lakh equity shares against an offer size of 69.81 lakh shares
  • The retail investors portion was subscribed 1.60 times, while that of non-institutional investors has been subscribed 9%

Mumbai: The 625-crore initial public offering (IPO) of Heranba Industries was subscribed 84% on Tuesday, the first day of bidding on the back of strong response from retail investors.

Heranba Industries is a crop protection chemical manufacturer and is one of the leading domestic producers of synthetic pyrethroids like cypermethrin, deltamethrin, lambda-cyhalothrin, etc.

The public issue has received bids for 58.78 lakh equity shares against an offer size of 69.81 lakh shares, as per the subscription data available on the exchanges.

The retail investors portion was subscribed 1.60 times, while that of non-institutional investors has been subscribed 9%.

Analysts at Samco Securities in a note said "Heranba Industries has a strong 19.5% market share in the pyrethroids market and caters to over 60 countries. The company has also been reducing debt on its books and trades at a reasonable valuation multiple of 25 times price to equity compared to its peers".

"The company faces high risk due to shoot up in raw material prices which forms a whopping 70% of its expenses. Moreover, it faces high competition risk from peers such as Rallis India, Bharat Rasayan and Sumimoto Chemical. But despite these risks, Heranba continues to capture a dominant position with sound fundamentals and diversification capabilities."

The offer size excludes anchor book of over 29.90 lakh equity shares. The company has already raised 187.5 crore from anchor investors on Monday.

The public issue comprises an offer-for-sale (OFS) of up to 90.15 lakh equity shares and a fresh issue of 60 crore shares. The price band for the issue has been fixed at 626-627 per share.

The net fresh issue proceeds will be utilised for working capital requirements.

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