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Heranba Industries Rs 625 crore IPO to open on February 23; Check details here

Heranba Industries Rs 625 crore IPO to open on February 23; Check details here

By Ankit Gohel  Feb 19, 2021 3:01:12 PM IST (Published)

Gujarat-based agrichemicals manufacturer Heranba Industries is set to launch its initial public offering (IPO) on February 23. This will be the seventh IPO in the year 2021 so far.

Gujarat-based agrichemicals manufacturer Heranba Industries is set to launch its initial public offering (IPO) on February 23. This will be the seventh IPO to hit Dalal Street since the start of 2021.

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Heranba Industries is a crop protection chemical manufacturer and is one of the leading domestic producers of synthetic pyrethroids like cypermethrin, deltamethrin, lambda-cyhalothrin etc.
The IPO comprises an offer for sale (OFS) of up to 90.15 lakh equity shares and a fresh issue of Rs 60 crore shares, according to the company’s red herring prospectus. The company plans to raise up to Rs 625 crore from the issue.
Here are key details about the IPO and the company:
  • The issue opens for subscription on February 23 and closes on February 25. The shares are expected to list on March 5, 2021.
  • The price band of the issue has been fixed at Rs 626-627 per share of the face value of Rs 10 each.
  • The issue consists of a fresh issue of Rs 60 crore and an offer for sale of 90.15 lakh equity shares by promoters. The OFS consists of 58,50,000 equity shares by Sadashiv K Shetty, 22,72,038 shares by Raghuram K Shetty, 8,12,962 shares by Sams Industries, 40,000 shares by Babu K Shetty and 40,000 shares by Vittala K Bhandary.
  • The company’s promoters Sadashiv K Shetty, Raghuram K Shetty, Babu K Shetty and Vittala K Bhandary, and promoter group holds 98.85 percent stake in the company.
  • Promoter holding post-issue will be 74.1 percent.
  • Investors can bid in the lot of 23 shares and multiples thereof. A retail-individual investor can apply for up to 13 lots (299 shares or Rs 187,473).
  • Ahead of the public offer, the anchor investors’ portion will be available on Monday, February 22, 2021.
  • The company proposes to utilise the net proceeds from the issue to finance its business working capital requirements and general corporate purposes.
  • Emkay Global Financial Services and Batlivala & Karani Securities India are the book running lead managers to the IPO while Bigshare Services is the registrar of the issue.
  • The shares of the company will be listed on both BSE and the National Stock Exchange (NSE).
  • About Heranba Industries
    Heranba Industries manufactures different types of pesticides including insecticides, fungicides, herbicides and other pest control products.
    The company operates in different verticals including domestic sales of Technicals to companies, Technicals exports, domestic sales of Branded formulations under its own brand name, formulations export, and manufacturing and selling of insect control chemicals.
    The company has a strong network in the domestic as well as overseas market. In India, it has 8,600 dealers across 16 states and 1 union territory whereas, in the overseas market, it exports its products to more than 60 countries through international distribution partners.
    The company has three manufacturing units in Vapi, Gujarat with an aggregate manufacturing capacity of 14,024 MTPA.
    Financials
    In FY19-20, revenue of Heranba Industries was Rs 967.91 crore and net profit was at Rs 97.75 crore.
    Analysts' View 
    "Heranba Industries has a robust past track record of performance. In the future, we expect the company to gain market share and improve margins," said Keshav Lahoti, Associate Equity Analyst, Angel Broking.
    The company has priced its issue at 22.1x PE on a trailing basis, which is quite reasonable by looking at the future prospects of the company. Its peers such as Rallis India, Sumitomo Chemicals and Bharat Rasayan are trading at 23.1x, 47.3x and 27.0x PE on a trailing basis respectively, he added.
    "The company return ratios are superior to peers (ROE is above 30%). It has a strong financial position and has been generating positive cash flow. We expect a good listing for the Company. We are positive on the long term prospects of the company, we recommend "Subscribe" to the Heranba Industries IPO for long term as well as for listing gains," Lahoti said.
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