The Rs 625-crore initial public offering (IPO) of Heranba Industries will open for subscription between Tuesday, February 23, 2021, to Thursday, February 25, 2021. The subscription for anchor investors will open on Monday, February 22, 2021, ahead of the public issue.
The price band of the IPO by the Gujarat-based agrichemicals manufacturer has been fixed at Rs 626-627 per share. Heranba's IPO comprises an offer for sale (OFS) of up to 90.15 lakh (90,15,000) equity shares, where investors can bid in the lot of 23 equity shares and multiples thereof. The shares were trading at Rs 827 in the grey market, quoting a premium of Rs 200 or 32% over the IPO price of Rs 627 apiece.
As per the company's DRHP, the net proceeds from the IPO will be utilised to finance the company's working capital requirements and general corporate purposes. Post the IPO, the promoters and promoter group shareholding will come down to 74.15 per cent from 98.85 per cent. Meanwhile, the public shareholding will rise to 25.85 per cent from 1.15 per cent.
The basis of share allotment is expected to be finalised on March 2 and shares are likely to be credited to Demat account on March 4. The equity shares are proposed to be listed on BSE and National Stock Exchange.
Keshav Lahoti-Associate Equity Analyst, Angel Broking said, "Heranba Industries has a robust past track record of performance. In the future, we expect the company to gain market share and improve margins. 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. Company return ratios are superior to peers (ROE is above 30%). Company 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."
Axis Capital said in its note, "The company has 3 manufacturing and packaging facilities in and around the industrial belt of Vapi, Gujarat having 174 reactors with an aggregate manufacturing capacity of 14,024 MTPA. There is no significant impact on the operations of Heranba and the Company is poised to generate growth in the operations. The impact of the lockdown to the Company was minimal as the company deals with Agro Products and the Government gave relaxation to the Agro Products."
Kotak Securities said in its note," HIL's promoters have more than thirty (30) years of individual experience in the agrochemicals sector and are adequately qualified to manage the operations of the Company from manufacturing, exports and marketing. Its Promoters are completely involved in the day to day affairs of the Company and future business strategies. Various domestic and multinational agrochemical companies operating in and outside India are HIL's customers for the Technicals manufactured by the company. HIL's core strength lies in the R&D of Active Ingredients for creating new Formulations, preparing dossiers for national and international registrations of these new Formulations."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.Incorporated on May 17, 1992, the crop protection chemicals manufacturer is one of the leading domestic producers of synthetic pyrethroids, that exports its products to more than 60 countries in the world. Most analysts term Heranba Industries IPO a good option for listing gains in the short term.