The initial public offering (IPO) of Dharmaj Crop Guard on Wednesday received a stupendous response from investors on the last day of bidding. The issue, which was fully subscribed on the first day, attracted bids for 28,43,51,820 crore equity shares against the IPO size of 80,12,990 shares, was booked 35.49 times till 5 pm today.
The quota for qualified institutional buyers (QIBs) was subscribed 48.21 times, while the category for non-institutional investors saw subscription of 52.29 times. The retail individual investors (RIIs) portion was subscribed 21.53 times and the employees portion was subscribed 7.48 times.
The IPO price band of the agrochemical company was fixed at Rs 216-237 per share. The company had raised Rs 74.95 crore from anchor investors ahead of its IPO.
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gray market premium
Market participants said the Dharamj Crops IPO gray market premium (GMP) was seen around Rs 48. This means that the gray market expected the company to list around Rs 285 (Rs 237 + Rs 48), which is 20 per cent higher than the IPO. Upper band price of Rs 237 per equity share.
“The company has a diversified product set with presence in domestic and international markets. The operations look relatively small as compared to its peers, however, revenue, EBITDA and margins are growing. At the upper band, the fiscal following the latest issue The in-demand P/E post-fresh issue comes to around 27.8x based on 2022 earnings. Given the growth and small issue size, huge demand is expected for this issue,” said Manan Doshi, UnlistedArena.com, Unlisted And working in pre-IPO. Share told Business Today.
Swastik Investmart: “The company has registered consistent growth in both revenue and profit. Profit margin has also improved consistently in a tough environment.” The brokerage has ‘Subscribe’ rating to the IPO.
KR Choksi: “Agrochemicals sector is gaining prominence and has bright prospects for the future. The company has good earning potential.” KR Choksi also recommended ‘subscribe’ calls for the IPO.
Mehta Equities: In terms of risks, the company faces constraints such as “licensing, climate change, government restrictions, and farmers’ demand supply utilization. Therefore, we believe that, although margins and profitability are on a steady rise, growth in a highly competitive segment Being that, smaller players like A DCGL may struggle in the run.The brokerage gave ‘Subscribe for Listing Gain Only’.
The company’s revenue from operations for FY20 grew by 30.36 per cent to Rs 394.21 crore, as against Rs 302.41 crore for FY21. Net profit grew by 36.88 per cent to Rs 28.69 crore in FY21 from Rs 20.96 crore in FY21.
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Elara Capital (India) and Monarch Networth Capital were the book-running lead managers to the issue.