Dharmaj Crop Guard IPO fully subscribed on day 1. GMP, other details

The initial public offering (IPO) of Dharmaj Crop Guard Ltd opened for public subscription on Monday, November 28, 2022 and the three-day issue will conclude on Wednesday, November 30. The price band has been fixed in the range of ₹216–237 per share.  The issue was fully subscribed on the first day of offer and ended the trade with 1.79 times subscription. The category for Retail Individual Investors (RIIs) received 2.60 times subscription, non-institutional investors portion was subscribed 1.80 times and Qualified Institutional Buyers (QIBs) 35 per cent.

The IPO has a fresh issue of up to ₹216 crore and an offer for sale of 14,83,000 equity shares.Dharmaj Crop Guard IPO consists of fresh issue of equity shares worth up to ₹216 crore and an offer-for-sale (OFS) of up to 14.83 lakh equity shares by the existing shareholders. At the upper end of the price band, the Ahmedabad-based company would fetch ₹251 crore.

As per market observers, Dharmaj Crop Guard shares are available at a premium (GMP) of ₹65 in the grey market today. The shares of the company are expected to list on the stock exchanges BSE and NSE on Thursday, December 8, 2022.

“The company has a diverse set of products with customers across domestic as well as international markets. The operations look relatively small compared to its peers, however, revenues, EBITDA & margins are on the rise. At the upper band, post-fresh issue, the asking p/e post fresh issue comes around 27.8x based on FY22 earnings. However, given the growth and small issue size, huge demand is anticipated for the issue,” said Abhay Doshi, co-founder of UnlistedArena.

Dharmaj Crop Guard is an agrochemical company engaged in the business of manufacturing, distributing, and marketing a wide range of agrochemical formulations.

The company aims to use the proceeds from the fresh issue for funding capital expenditure towards setting up of a manufacturing facility at Saykha, Bharuch, Gujarat; funding incremental working capital requirements of the company; repayment and/or pre-payment, in full and/or part, of certain borrowings of the company, and general corporate purposes.

“The upward momentum in pesticide industry output is expected to continue going forward, backed by a growth in food consumption in the domestic market amid an expected increase in population, government support for agriculture, demand from export markets, and the horticulture and floriculture markets, among others. Profit margins are also rising continuously in a tough environment, so we assign a "Subscribe" rating to this IPO,” said Swastika Investmart.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.