India Pesticides’ subscription of Rs 800 crore is opening on Wednesday (June 23, 2021). The price band of the IPO has been kept at 290-296 per share. Face value is one rupee. The company is an agrochemical manufacturer. It is one of the fastest growing companies in terms of volume in the manufacture of chemical technologies. Apart from this, it manufactures formulations and APIs. At present, the company manufactures eight technologies, two APIs and 30 formulations. The company continues to list at a PE of 25.34 with a market capitalization of Rs 3408.8 crore. While its peer companies Dhanuka Agritech, UPL Limited, Rallis India Industries’ PE is 21.4, 20.4, 31.5 respectively. is 58.6. The question is, how much will this IPO be suitable for investors.
India Pesticides’ tough competition from competing companies
According to analysts at Axis Capital, India Pesticides competes with both domestic and global manufacturers. In the case of manufacturing of different chemicals, India Pesticides has a competition with these companies. In the domestic market, it competes with UPL Limited, PI Industries Limited and Jubilant Lifesciences Limited. In the international market, China National Corporation Limited is from Sumitomo Chemicals and BASF SE.
IPO fundamentals strong
Yash Gupta, Equity Research Associate, Angel Broking says that investors should invest by looking at the fundamentals of this IPO. This IPO is at a PE level of 24.5 times higher on the higher band of Rs 296. Gupta says that the overall fundamentals of the company are very attractive. Our outlook on Indian pesticides is positive. Rajesh Singla, founder and CEO of pre-IPO consultancy firm Planify India, says that the company’s prospects are looking good in terms of revenue and profit. Operating margin is 28 percent. He says that the company’s IPO is expected to get good response from retail investors.
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(Article : Surabhi Jain)