Dharmaj Crop Guard IPO Review: Dharmaj Crop Guard Limited is coming up with its Initial Public Offering. The IPO will open for subscription on November 28th, 2022, and close on November 30th, 2022. It is looking to raise Rs 251.15 crore, out of which Rs 216 crore will be a fresh issue and the rest Rs 35.15 crore will be an Offer for Sale.
In this article, we will look at the Dharmaj Crop Guard IPO Review 2022 and analyze its strengths and weaknesses. Keep reading to find out!
Dharmaj Crop Guard IPO Review – About The Company
Dharmaj Crop Guard is an agrochemical company that is engaged in the business of manufacturing, distributing, and marketing a wide range of chemicals. Its products include insecticides, fungicides, herbicides, plant growth regulators, micro fertilizers, and antibiotics that are supplied to B2C and B2B customers.
Their products are sold in 12 states through a network comprising over 3,700 dealers having access to 8 stock depots in India, as of November 30, 2021.
The company has a strong international presence as it exports its products to more than 20 countries including Latin America, East African Countries, the Middle East, and Far East Asia.
Some of the key customers of the company include Atul Limited, Heranba Industries Limited, Innovative, Meghmani Industries Limited, Bharat Rasayan Limited, and Oasis Limited.
In addition to that, the company manufactures and sells general insect and pest control chemicals for Public Health protection such as crop protection solutions to the farmers.
The product portfolio of the company
- Insecticides: Their top branded products include Padgham, Lubrio, Nilaayan, Dahaad, Prudhar, and Remora amongst others.
- Fungicides: Their top branded products include Gagandip, Sajaag, Lokraj, Rishmat, and Kaviraj amongst others.
- Herbicides: Their top branded products include Dharozar, Aatmaj, Rodular, Dharolik, Kohha, Kawayat Super, and Sadavirum amongst others.
- Plant growth regulator: Their top branded products include Rujuta, Greenoka, and Stabilizer amongst others.
- Micro Fertilizers: Their top branded products include Zeekasulf, Aakuko, Thandaj, and Zusta amongst others
- Antibiotic: They sell brand products namely Retardo.
The competitors of the company
(Source: DRHP of the company)
Dharmaj Crop Guard IPO Review – Financial Highlights
(Source: DRHP of the company)
Dharmaj Crop Guard IPO Review – Industry Overview
The Indian pesticide industry is primarily divided into Insecticides, Fungicides, and Herbicides. Insecticides account for a major share of around 55% followed by herbicides and fungicides with an approximate share of 23% and 18%, respectively.
In the global agrochemicals market, India is the 4th largest producer led by the USA, Japan, and China. Along with that, India has also emerged as the 13th largest exporter of pesticides globally.
According to Company Commissioned CareEdge Report, the overall Indian pesticides, and other agrochemicals market grew at a CAGR of 4.5% from Rs.368 billion in 2013-14 to Rs.439 billion in 2017-18.
Moving forward, the industry is expected to grow at a CAGR of 5.2%-5.7% by 2023-24 on account of an upward growth expected in the international market and a likely increase in domestic usage of pesticides in India.
Strengths
- The company has a strong and diversified product portfolio.
- The company has been able to develop strong distribution channels and stable relationships with its customers over the years.
- The company has a strong Research and Development (“R&D”) facility with a focus on innovation and sustainability.
- The company is led by experienced Promoters and a management team.
- The company has strong and effective branding, promotional, and digital strength.
Weaknesses
- The company is subject to strict technical specifications, quality requirements, regular inspections, and audits by the government and its customers. Any deviation will lead to a negative impact on their reputation.
- The nature of the business is cyclical as the sale of its products is subject to seasonal variations and climatic conditions.
- New-age pest management and crop protection measures, such as organic farming, biotechnology products, pest-resistant seeds, or genetically modified crops can be an emerging threat to their product.
- The products of the company can be hazardous to its worker’s health and the environment. Thus, it is subject to stringent regulations, deviation from which could attract hefty fines.
- The company has certain outstanding litigation proceedings against them, their promoters, and their Directors.
Dharmaj Crop Guard IPO Review – GMP
The shares of Dharmaj Crop Guard traded at a premium of 18.99% in the grey market on November 24th, 2022. The shares tarded at Rs 282. This gives it a premium of Rs 45 per share over the cap price of Rs 237.
Dharmaj Crop Guard IPO Review – Key IPO Information
Promoters: Rameshbhai Ravajibhai Talavia, Jaman Kumar Hansrajbhai Talavia, Jagdishbhai Ravjibhai Savaliya, and Vishal Domadia.
Book Running Lead Managers: Elara Capital (India) Private Limited and Monarch Networth Capital Limited.
Registrar To The Offer: Link Intime India Private Limited.
| Particulars | Details |
|---|---|
| IPO Size | ₹251.15 Crore |
| Fresh Issue | ₹216 Crore |
| Offer for Sale (OFS) | ₹35.15 Crore |
| Opening date | November 28, 2022 |
| Closing date | November 30, 2022 |
| Face Value | ₹10 per share |
| Price Band | ₹216 to ₹237 per share |
| Lot Size | 60 Shares |
| Minimum Lot Size | 1(60 Shares) |
| Maximum Lot Size | 14 (840 Shares) |
| Listing Date | December 8, 2022 |
The Objective of the Issue
The Net Proceeds from the Fresh Issue are proposed to be utilized for:
- Funding capital expenditure towards setting up a manufacturing facility at Saykha Bharuch, Gujarat.
- Funding incremental working capital requirements.
- Repayment and/or pre-payment, in full and/or part, of certain borrowings.
- General corporate purposes.
In Closing
In this article, we looked at the details of Dharmaj Crop Guard IPO Review 2022. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for investors to look into the company and analyze its strengths and weaknesses. That’s it for this post.
Are you applying for the IPO? Let us know in the comments below.
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