Nova Agritech IPO opens today: Check GMP, review, other key details. Should you subscribe?
- The Nova Agritech IPO, worth ₹143.81 crore, comprises a fresh issue of ₹112 crore and an offer-for-sale (OFS) of 7,758,620 equity shares. Nova Agritech IPO GMP is +20, indicating that the share price is trading at a premium of ₹20 in the grey market.
Nova Agritech IPO date of subscription has been rescheduled for today (Tuesday, January 23) and will close on Thursday, January 25. Initially, the Nova Agritech IPO was scheduled to open on Monday, January 22, but the equity market remained closed on Monday on account of a public holiday in the country celebrating the inauguration of the Ram Temple in the northern city of Ayodhya. Hence, the opening was postponed. The Nova Agritech IPO price band has been set in the range of ₹39 to ₹41 per equity share of the face value of ₹2. Nova Agritech IPO raised ₹43.14 crore from anchor investors on Friday, January 19. The company allocated more than 1.05 crore equity shares at ₹41 per share to anchor investors.
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The Nova Agritech IPO lot size is 365 equity shares and in multiples of 365 equity shares thereafter. Nova Agritech IPO has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors.
Malathi S, Kiran Kumar Atukuri, Yeluri Family Trust, Suraksha Agri Retails (India) Private Limited, and others are the company's promoters.
The promoters now hold 5,49,44,020 equity shares collectively, or 84.27% of the issued shares, as of the date of this Red Herring Prospectus (RHP), which is January 12.
As a manufacturer of agricultural inputs, Nova Agritech specialises in crop protection, crop nutrition, and soil health management. Our tech-driven farmer-driven solution approach allows us to provide products that are both nutritionally balanced and environmentally sustainable, with a focus on research and development.
Nova Agritech IPO details
Nova Agritech IPO, which is worth ₹143.81 crore, comprises a fresh issue of ₹112 crore, and an offer-for-sale (OFS) of 7,758,620 equity shares of ₹2 aggregating up to ₹31.81 crore by the selling shareholder, Nutalapati Venkatasubbarao.
The net proceeds of the issue are planned to be used as follows: Investment in the subsidiary Nova Agri Sciences Private Limited for the construction of a new formula factory; financing the company's capital expenditures for the expansion of an existing formula plant; financing the company's working capital needs; investment in subsidiary Nova Agri Sciences Private Limited to finance working capital needs; and for general business purposes.
Keynote Financial Services Ltd and Bajaj Capital Limited are the lead managers for the Nova AgriTech IPO, while Bigshare Services Pvt Ltd is the registrar for the issue.
Nova Agritech IPO GMP today
Nova Agritech IPO GMP or grey market premium is +20. This indicates Nova Agritech share price were trading at a premium of ₹20 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Nova Agritech share price was indicated at ₹61 apiece, which is 48.78% higher than the IPO price of ₹41.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
Nova Agritech IPO Review
Swastika Investmart Ltd
Through its diverse range of branded products, Nova Agritech is an agri-input company that offers a one-stop shop for the health of crops and soil, according to the brokerage. It is well-established worldwide, and its successful marketing plan sets up the business for future expansion.
With steady growth over the last three years and well-defined development plans, Nova Agritech showed an exceptional financial performance.
"However, some key risks require consideration. The company's business is inherently linked to climatic conditions and relies on a limited geographical area for the majority of its revenue.
Additionally, the agri-input sector is highly competitive. However, the issue is valued at a P/E of 13.05x, and its RoNW of 38.27% is also attractive, thus considering all the factors we suggest to Apply for this IPO for listing benefits," the brokerage said.
BP Wealth
As per the brokerage, the company's comprehensive farmer outreach programme and well-established distribution network throughout cities guarantee a high level of product acceptability. In addition, Nova AgriTech is positioned as a one-stop shop for solutions due to its dedication to eco-friendly solutions, which is bolstered by a well-stocked R&D centre and knowledgeable staff. Nova AgriTech has shown strong and consistent revenue growth over the previous three years in terms of its finances. The net profit margins, in particular, have expanded significantly and admirably throughout this time.
"With an impressive ROE of 32.1%, ROA at 11.3%, and PAT margins of 9.7%, the company exhibits attractive financial metrics in a highly competitive segment. The comfortable asset turnover ratio and efficient asset utilisation indicate the potential for sustained profitability. Turning to valuations, the PE ratio stands at 12.3x based on the annualised diluted H1FY24 EPS which appears relatively low compared to peers in the industry. The valuation outlook hinges on Nova
AgriTech's ability to maintain its current sales growth rate, preserve net margins, and gradually improve them. Based on the positives discussed, we give the issue a “SUBSCRIBE” rating," the brokerage said.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
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