Heranba IPO will open on February 23 and close on February 25.
At the upper price band of ₹627, one lot will cost ₹14,421 and retail investors can apply a maximum of 13 lots
The IPO of Heranba Industries, a Gujarat-based agrochemical company, will open on February 23 and the company has fixed a price band of ₹626-627 per share. The issue closes on February 25. Heranba is one of the leading manufacturers of synthetic pyrethroids in India. It manufactures intermediates, technicals and formulations and also exports to more than 60 countries. The company has three manufacturing plants and has over 9,400 dealers.
1) The lot size in Heranba IPO has been fixed at 23. At the upper price band of ₹627, one lot will cost ₹14,421 and retail investors can apply a maximum of 13 lots.
2) According to brokerages, the share allocation in Heranba IPO is likely to be finalised on March 2nd and listing may happen on March 5th.
3) Emkay Global Financial Services Ltd and Batlivala and Karani Securities India are the book running lead managers to the IPO.
4) Bigshare Services Pvt Ltd is the registrar of the IPO and will manage share allocation and refund.
5) Heranba is offering up to 99.8 lakh shares in the IPO, with 90.2 lakh shares under offer for sale and the rest through fresh issue of shares. The funds raised through fresh issue of shares will be utilised to finance the company's working capital requirements and general corporate purposes.
6) Post issue, the shareholding of promoters will fall to 74.2%, from 98.8% earlier.
7) Today pyrethroids find usage in significant applications across pest protection, environmental health and crop care as well as animal health.
8) In FY20, the company had recorded a turnover of ₹951 crore as compared to ₹745 crore in FY18 while profit jumped to ₹97 crore from ₹50 crore.
9) According to the IPO prospectus, in 2019, Heranba Industries Limited dominated the India pyrethroids market, accounting for a share of 19.5% of the total Indian pyrethroids production values.
The other players in this segment included Tagros Chemicals, Hemani Industries, Dhanuka Agritech, Insecticides (India) Limited, Syngenta India Limited, Sumitomo Chemical India Limited, UPL Limited, Bayer CropScience, and Rallis India Limited.
10) "At the upper end of the IPO price band, it is offered at 22.67 times its TTM EPS earnings, with a market cap of Rs. 2509 crore. Considering the company’s dominant position in pyrethroids market, strong balance sheet, high RoNW of 30.47% as per FY20 financial statements, strong management and reasonable valuations; we give this IPO a 'subscribe' rating." domestic brokerage Anand Rathi said in a note.
Another brokerage Geojit has a subscribe rating. "At the upper price band of Rs.627, Heranba Industries is available at P/E of 18.9x (annualized basis on FY21E EPS of Rs.33.2) which is reasonable compared to its peers. We assign a “Subscribe" rating for the issue on a long-term basis considering the strong distribution network, increasing export opportunity with healthy margins and profitability," the brokerage said.