The initial public offering (IPO) of agrochemical manufacturer India Pesticides has been subscribed 1.29 times on the first day of the bidding process. The public issue received bids for 2.49 crore equity shares against the IPO size of 1.93 crore equity shares.
The IPO size has been reduced to 1.93 crore equity shares after the company raised Rs 240 crore from anchor investors on June 22.
The portion set aside for retail investors has been subscribed 2.51 times while the part for non-institutional investors has been subscribed 19 percent, according to the subscription data available on the exchanges. Qualified institutional investors have not put in their bids yet.
The price band for the offer has been fixed at Rs 290-296 per equity share. The issue closes on Friday.
The Rs 800-crore public issue includes a fresh issue of shares worth Rs 100 crore and an offer for sale of shares worth Rs 700 crore by promoters and shareholders.
Given the company’s strong R&D capabilities, diversified product portfolio, positioning in the industry, loyal customer base, reasonable valuations and healthy financials, analysts have given a ‘Subscribe’ rating to the IPO.
“At the upper end of the IPO price band, it is offered at 25.3x of its FY21 earnings, demanding Rs 34,091 million market cap as compared to its other listed peers like Dhanuka Agritech, Bharat Rasayan and Rallis India which are currently trading at a PE of 31.7x, 36.2x and 32.9x respectively,” said Anand Rathi.
The brokerage believes that due to the lower valuations as compared to its peers, India Pesticides is placed at an attractive valuation.
First Published: IST