Heranba Industries shares jump nearly 50% on market debut

Shares of agro-chemical company Heranba Industries made a strong debut on BSE and NSE and rose as much as ₹944 as compared to issue price of ₹627. The IPO of the Gujarat-based company, which was open between February 23 and February 25, was subscribed over 80 times. Heranba Industries had fixed a price band of ₹626-627 per share.

Many brokerages had recommended subscribe to the ₹525 crore issue of the crop protection chemical manufacturer, exporter and marketing company, citing attractive valuations.

"Trading Members of the Exchange are hereby informed that effective from March 05, 2021, the equity shares of Heranba Industries Ltd (Scrip Code: 543266) are listed and admitted to dealings on the Exchange in the list of 'B' Group Securities," the company said in a communication to exchanges.

Heranba offered up to 99.8 lakh shares in the IPO, with 90.2 lakh shares under offer for sale and the rest through fresh issue of shares. Post issue, the shareholding of promoters will fall to 74.2%, from 98.8% earlier.

During FY18-20, Heranba’s revenue grew at 13.3% CAGR to Rs. 951 cr in FY20. Over the same period, its EBITDA grew at a CAGR of 21.4% to ₹129 cr in FY20 while the net profit grew at a CAGR of 44.4% to Rs. 98 cr in FY20.

"At the upper price band of the IPO, Heranba is valued at 25.7x FY20 PE (post issue)," Ventura Securities said in a note.

Heranba has a 19.5% market share in the pyrethroids market and exports to over 60 countries. Pyrethroids find usage in significant applications across pest protection, environmental health and crop care as well as animal health.

"Being a dominant player in Pyrethroids market, Heranba is well placed to reap the benefits of industrial growth on the back of potential for export, favorable Govt. policies & increased demand for horticulture and forticulture. We assign a “Subscribe" rating for the issue on a long-term basis considering the strong distribution network, increasing export opportunity with healthy margins and profitability," another brokerage Geojit sai.