Nova Agritech's initial public offering (IPO) worth Rs 143.81 crore will open for subscription on January 23. The offer consists of a fresh issue of 2.73 crore shares and an offer for sale of 77.58 lakh shares.
The IPO will open for subscription on January 23 and close on January 25, 2024.
2) Price range
The price band for the issue has been set at Rs 39-41 per share.
3) Offer details
Nova Agritech plans to raise Rs 143.81 crore through IPO. The public offer consists of a fresh issue of 2.73 crore shares worth Rs 112 crore and an OFS of 77.58 lakh shares worth Rs 31.81 crore. Suraksha Agri Retails (India), Malathi S and Kiran Kumar Atukuri are the founders of the company.
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The company raised Rs 43.14 crore from four institutional investors on January 19. AG Dynamic Funds is the largest investor among them and bought nearly Rs 13 crore shares of the company, while Neomile Growth Fund – Series I, Saint Capital Fund and Quantum State Mutual Fund have picked shares worth more than Rs 10 crore each.
4) Objectives of the output
The net proceeds from the new issue of Rs 14.20 billion will be used for investment in subsidiary Nova Agri Sciences for setting up of a new formulation plant, Rs 10.49 billion for financing capital expenditure of Nova Agritech and for expansion its existing formulation plant.
The company will also use Rs 26.65 crore to fund the working capital requirements of Nova Agritech and Rs 43.36 crore to invest in the working capital requirements of Nova Agri Sciences.
5) Lot size
Investors can then bid for at least 365 shares and multiples of 365. Therefore, the minimum investment for retail investors would be Rs 14,235 (365 (lot size) x 39 (lower price band)). At the high end, the bid amount increases to Rs 14,965.
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6) Company profile
Nova Agritech is an agricultural inputs manufacturer offering soil health management, crop nutrition and crop protection products focused on a technology-based, farmer-driven solutions approach. The company has an entire dealer network with around 11,722 dealers.
The company's dealer network currently extends across 16 states of India namely Andhra Pradesh, Telangana, Maharashtra, Karnataka, Madhya Pradesh, Rajasthan, Chhattisgarh, Tamil Nadu, Uttar Pradesh, Odisha, West Bengal, Bihar, Gujarat, Jharkhand, Uttarakhand and Jammu & Kashmir and 02 in Nepal. The Company has also entered into marketing, distribution and supply agreements with certain third parties in Bangladesh, Sri Lanka and Vietnam and is currently awaiting the necessary approval to commence business in these jurisdictions.
7) Finance
In FY2023, revenue grew 13 per cent to Rs 211 crore compared to Rs 186 crore in FY22. Net profit rose 43 per cent to Rs 20.49 crore in FY23. The company reported return on equity (RoE) and return on capital employed (RoCE) of 38.27 per cent and 27.25 per cent respectively in FY23. Net debt stood at Rs 10.8 crore during the same period and the debt to equity ratio was 1.11x.
8) BRLMs and promoters
The underwriters of the IPO are Keynote Financial Services and Bajaj Capital, while Bigshare Services is acting as the registrar. The promoters of the company are Bajrang Bothra, Laxmi Pat Bothra, Sanjay Singhania and Ajay DD Singhania.
9) Risks
(i) As on November 30, 2023, the total outstanding debt of the Company stood at Rs 44.17 Crore.
(ii) The Company is required to obtain and maintain various licenses and permits for its business operations.
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(iii) The strength of the Company's brands is critical to its growth and success, and it may face challenges in consistently maintaining and developing its brands.
10) Date of listing
The allotment basis will be decided by January 29, shares will be credited in demat accounts by January 30 and shares will be listed on NSE and BSE on January 31.
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