Today on July 5, there is a bullish trend in Sensex and Nifty50 and both are trading with an edge. India Pesticides has also been listed today and due to the bullish market, the shares of this agrochemical firm have been listed at Rs 360 at a premium of 21.62 per cent over the issue price of Rs 296 per share. India Pesticides Limited (IPL) 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. When it started trading for shares for the first time, the company’s market capitalization was Rs 4100 crore.
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IPO was oversubscribed 29 times
The initial public offering (IPO) of India Pesticides was oversubscribed 29 times. The portion reserved for retail investors was oversubscribed by 11.3 times, the portion reserved for non-institutional investors (NIIs) by 51 times. The portion reserved for Qualified Institutional Buyers (QIBs) was oversubscribed by 42 times. With all the three parts being oversubscribed, the public issue was in high demand. Investors could apply for subscription in lots of 50 equity shares for this stock with a face value of Re 1 per share.
The IPO was a mix of Rs 700 crore off for sale (OFS) and Rs 100 crore fresh equity shares. According to HDFC Securities, the promoter stake in the company has come down from 82.7 per cent to 59.7 per cent post the issue. Public shareholding has increased from 17.3 per cent to 40.3 per cent.
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Brokerage firm gave subscribe rating
In its IPO note, brokerage and research firm Motilal Oswal had recommended India Pesticides for subscription due to its strong position in the fast-growing agrochemical space, diversified product portfolio and sound financials. Strong R&D, long association with MNCs, competitive pricing and wide distribution network have strengthened investor confidence in India Pesticides. Motilal Oswal considered the valuation of the IPO reasonable at 25.3x FY21 P/E vis–vis Pierce and gave a subscribe rating on that basis. Apart from India Pesticides, its sector’s UPL, PI Industries, Sumitomo Chemicals, Rallis and Dhanuka Agritech are also listed on the stock exchange.
(Article: Kshitij Bhargava)
(Stock recommendations in the story are based on information provided by research analysts and brokerage firms. Financial Express Online does not take any responsibility for any investment advice. Please consult your advisor before investing.)
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