Dharmaj Crop Guard Limited IPO Details
The Dharmaj Crop Guard IPO will begin on November 28 and end on November 30. Dharmaj Crop Guard’s initial public offering (IPO) is expected to raise about 251 crores, consisting of a 216 crore new issue and an offer to sell up to 1,483,000 equity shares at a Face value of ₹ 10 per share.
Dharmaj Crop Guard Limited is an agrochemical business that was established in 2015. Insecticides, fungicides, herbicides, plant growth regulators, micro fertilisers, and antibiotics are just a few of the many agrochemical formulations that the company manufactures, distributes, and markets to both B2C and B2B clients.
To help farmers increase production and profitability, the organisation also offers crop protection products. More than 20 nations in Latin America, East Africa, the Middle East, and Far East Asia are among the destinations for Dharmaj Crop Guard Limited’s exports.
Dharmaj Crop Guard Limited had more than 196 institutional goods as of November 30, 2021, and sold them to more than 600 customers situated in India and other countries. By November 30, 2021, the business had sold its goods to more than 60 clients in 20 different nations.
Ahmedabad, Gujarat, India, is home to the company’s production facilities. A research and development (“R&D”) centre is also housed within the production site of Dharmaj Crop Guard Limited. As of November 30, 2021, the company’s branded products are sold in 12 states via a network of over 3,700 dealers who have access to 8 stock depots in India.
Objective of the Issue
It is proposed that the Fresh Issue’s net proceeds be used as follows:
- 105 crores of rupees in funding will be used to build a manufacturing facility in Saykha, Bharuch, Gujarat.
- 45 crores of rupees for funding incremental working capital requirements.
- 10 crores of rupees will be used to fully or partially repay/ prepay some of the company’s borrowings.
- General Corporate purposes.
| Dharmaj Crop Guard IPO | Details |
|---|---|
| Price Band | ₹ 216 to ₹ 237 per share |
| Face Value | ₹ 10 per share |
| Issue Size | 251.15 Crs |
| Opening Date | 28 Nov 2022 |
| Closing Date | 30 Nov 2022 |
| Credit to Demat | 08 Dec 2022 |
| Allotment | 05 Dec 2022 |
| Initiation of Funds | 06 Dec 2022 |
| Listing Date | 08 Dec 2022 |
| Pre Issue Share Holding | 100% |
| Post Issue Share Holding | 73.03% |
| 1 lot | 60 Shares |
| Retail Quota | 35% |
| QIB Quota | 50% |
| NII Quota | 15% |
| Retail (Min) | 1 Lot |
| Retail (Max) | 14 Lots |
| S-HNI (Min) | 15 Lots |
| B-HNI (Min) | 71 Lots |
| Promoters | Rameshbhai Ravajibhai Talavia Jamankumar Hansarajbhai Talavia Jagdishbhai Ravjibhai Savaliya Vishal Domadia |
| Draft Red Herring Prospectus | DRHP |
| Red Herring Prospectus | RHP |
| Grey Market Premium | Click Here |
| Allotment Status | Check Here |
The Dharmaj Crop Guard IPO’s bid period is from November 28, 2022, at 10:00 A.M., to November 30, 2022, at 5:00 P.M. UPI Mandate confirmation must be received by 5 PM on the day the issue closes.
EBITDA & PAT (in Crs)
EBITDA– Earnings Before Interest Tax Depreciation & Amortization PAT – Profit After Tax
Total Assets, Share Capital and Borrowings (in Crs)
Revenue Growth (in Crs)
Peer Comparison
| Particulars | Dharmaj Crop Guard | Rallis India Limited | India Pesticides Limited | Heranba Industries Limited | Punjab Chemical & Crop Protection Ltd. | Bharat Rasayan | Astec Lifesciences |
|---|---|---|---|---|---|---|---|
| Face Value | 10 | 1 | 1 | 10 | 10 | 10 | 10 |
| EPS | 7.44 | 8.44 | 13.78 | 47.25 | 68.07 | 423.52 | 49.76 |
| PE | 31.85 (taking 237 as the listing price) | 27.45 | 18.53 | 10.80 | 17.51 | 24 | 45.92 |
| RoNW% | 18.15 | 9.68 | 24.76 | 26.46 | 36.99 | 22.85 | 22.66 |
| Revenue from Operations (in ₹ Crs) | 394.21 | 2603.93 | 716.14 | 1450.37 | 933.46 | 1301.15 | 676.57 |
| EBITDA Margin (%) | 11.72 | 11.58 | 31.69 | 19.24 | 15.06 | 20.40 | 24.32 |
| PAT Margin (%) | 7.28 | 6.31 | 22.05 | 13.04 | 8.94 | 13.53 | 13.29 |
| ROE | 34.64 (FY 2022) | 9.68 | 24.76 | 26.46 | 36.99 | 22.85 | 22.66 |
Analysis:
If we analyse the financial parameters of Dharmaj Crop Guard, then it can be clearly seen that the firm is on the growth path with both EBITDA and PAT increasing on year to year basis. Total assets of the company in comparison to its borrowings are continuously increasing on YOY bais. This firm’s revenue growth is also good.
Taking the EPS as 9.60 as per RHP till March 2022, PE ratio is 24.68 and if we take the EPS as 7.44 as per RHP till July 31, 2022, PE ratio is 31.85 which is on the higher side in comparison to the Industry PE of 24.70. This simply depicts that the IPO price is on the higher side but we cannot make any decision without considering other fundamental parameters.
RoNW of 18.15% & EBITDA margin of 11.72% as per RHP, are second lowest in comparison to its peer companies. But if you compare its own Pat Margin growth then it is on the growth path and it can be confirmed by checking the revenue from operations which is also steadily increasing on YOY basis. If we check the the PAT in four months from April – July 2022, it can be seen that the profit earned in the first quarter is almost equal to 200 crores which is just 80 crores less than the profit earned in the whole FY 2022. This depicts that the company is on the high growth path.
ROE of 34.64 till Fy 2022 as per RHP, is tremendous in comparison to its peers and with low levels of debts, this parameter indicates that the returns generated were good in comparison to its peers.
So, overall as the markets are in bullish mode with Nifty above 18400 levels and the high grey market premium indicates that it might gets listed with a 15-20% gain. Gain can be realised on the day of listing as there are chances that it might correct after listing.