India Pesticides Rs 800-crore IPO opens June 23, firm soon to announce price band

India Pesticides Rs 800-crore IPO is scheduled to open for subscription on June 23, 2021. Agrochemical technicals company’s issue will close on June 25. The public issue comprises fresh issue of shares worth Rs 100 crore and offer-for-sale (OFS) of Rs 281.4 crore by promoter Anand Swarup Agarwal and Rs 418.6 crore by selling shareholders. The equity shares are proposed to be listed on BSE and NSE. The book running lead managers to the issue are Axis Capital Ltd and JM Financial Ltd, while the registrar to the offer is KFin Technologies Private Ltd.

India Pesticides’ listed peers are Dhanuka Agritech Ltd, Bharat Rasayan Ltd, UPL Ltd, Rallis India Ltd, PI Industries Ltd, Sumitomo Chemical India Ltd and Atul Ltd. The average industry price to earning (P/E) ratio stands at 47.44x. While the weighted average return on net worth for fiscals 2019, 2020, 2021 is 30.37 per cent. The company plans to utilise net proceeds towards funding working capital requirements worth Rs 80 crore and for general corporate purposes.

The company, in red herring prospectus, said all bidders, except anchor investors, mandatorily required to use the ASBA process for participating in the offer by providing details of their respective ASBA account in which the corresponding bid amount will be blocked by SCSBs (Self-Certified Syndicate Bank). India Pesticides is an R&D-driven agrochemical manufacturer of Technicals with a growing Formulations business. The company is the sole Indian manufacturer of five Technicals and among the leading manufacturers globally for Captan, Folpet and Thiocarbamate Herbicide, in terms of production capacity (Source: F&S Reports).

India Pesticides is diversified into manufacturing herbicide and fungicide Technicals and active pharmaceutical ingredients (APIs), it also manufactures herbicide, insecticide and fungicide Formulations. It manufactures generic Technicals that are used in the manufacturing of fungicides and herbicides as well as APIs with applications in dermatological products. Certain key fungicide Technicals that India Pesticides manufactures include (i) Folpet, used to manufacture fungicides that control fungal growth at vineyards, cereals, crops and biocide in paints; and (ii) Cymoxanil, used to manufacture fungicides that control downy mildews of grapes, potatoes, vegetables and several other crops.

Major herbicide Technicals that the company manufactures include Thiocarbamate herbicides that have application in field crops, such as, wheat and rice, and are used globally. The APIs it manufactures have anti-scabies and anti-fungal applications. It also manufactures and sells various formulations of insecticides, fungicide and herbicides, growth regulators and Acaricides, which are ready-to-use products.

India is currently the fourth-largest producer of crop protection chemicals in the world. Multinationals across the globe are taking advantage of cost-effective manufacturing in India along with the availability of skilled labour. India is expected to emerge as an export hub for the crop protection chemicals manufacturing, which will be exported to developed and developing economies around the world.