India Pesticides shares list at 21% premium to the IPO price

Today morning, the stock market saw a new high as the shares of India Pesticides made a strong listing on BSE and NSE with the stock price rising to ₹368 as compared to the issue price of ₹296.

The IPO of India Pesticides Limited was subscribed 29 times, with the retail investor segment at over 11 times. The Qualified Institutional Buyers (QIBs) category was subscribed 42.95 times and non-institutional investors 51.88 times. The offer was in a price range of ₹290-296 per share.

However, during the listing, the retail investors bid for 11.3 times the portion reserved for them while non-institutional investors bid for 51 times the reserved quota. Investors were eligible to bid for shares in multiples of 50 equity shares of face value Re 1 per share. At the upper end of the price band, this translated to a minimum investment of Rs 14,800.

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This IPO was a blend of an offer for sale which amounted to Rs 700 crore and a fresh issue of equity shares worth Rs 100 crore. Post-issue the promoter shareholding in the company will drop to 59.7 percent from 82.7 percent.

The public shareholding will increase to 40.3 percent from 17.3 percent pre-IPO. Domestic brokerage and research firm Motilal Oswal mentioned they would like to give an IPL, given its presence in the fast-growing agrochemical space, diversified product portfolio, and robust financials.

They further added that strong research and development, long-term relations with MNCs, cost competitiveness, and extensive distribution network are some of the other key positives for India Pesticides. Oswal found the IPO to be “reasonably valued” at 25.3x FY21 P/E on a post-issue basis, when compared to peers and had a “subscribe” rating on the IPO.