Dhanuka Agritech eyes on agrochemical business expansion

Dhanuka Agritech, the Rs-450 crore company, is planning to raise around Rs 50 crore to meet its expansion needs and increase product portfolio in agrochemicals.

A follow-on public issue of 15 lakh shares has been proposed. This will change the statutory management holding in the company according to the SEBI requirement, said Mr R.G. Agarwal, Group Chairman.

At present, the management holds 90% stake. The expansion is planned for the unit in Sanad in Gujarat, where the company already has 10 acres, he told newspersons here on Thursday.

Dhanuka, which is into agrochemicals, fertilisers and seeds recorded a 82 per cent increase in net profit for the first quarter of current fiscal at Rs 8.76 crore (Rs 4.81 crore) compared with the previous year. The turnover for the quarter was up 31.33 per cent at Rs 81.02 crore (Rs 61.69 crore).

The favourable monsoon and the shortage of agriculture labour in addition to the advantages of agrochemicals are driving the consumption of pesticides and weedicides in the country. Dhanuka Agritech is well positioned to meet this rising demand, said Mr Agarwal. “However, we want to increase the awareness levels among farmers on the real benefits as also the technologies that help soil and water conservation.”

For this, the company has tied up with universities to organise seminars focussed on latest technologies that help increase productivity and production, Mr Agarwal added.

The company has tied up with four Japanese and three US companies to bring in agrochemical products and develop formulations.

The latest offering is a weedicide from the Japanese Nissan Chemical Industries targeting soya, cotton and groundnut crops. It is a major player in the Rs 8, 000-crore Indian pesticide market.

The BSE-listed stock on Thursday closed at Rs 456.85, a drop of 1.13 per cent over the previous days close. The stock recently registered 52-week high at Rs 489.9, while its 52-week low of Rs 161.05 was in October 2009.