Continuing the spree of initial public offerings (IPO), agrochemical firm Heranba Industries’ public problem will open for subscription next week. The Gujarat-based agrochemical firm is hunting to raise Rs 625 crore from capital markets by means of the problem which will be a mix of an Offer for Sale (OFS) by current shareholders and a fresh problem of equity shares. Heranba Industries will join peers such as Rallis India, Dhanuka Agritech, Sumitomo Chemical India, and PI Industries, amongst other individuals on the stock exchanges.
Heranba’s IPO consists of an OFS by promoters Sadashiv K. Shetty and Raghuram K. Shetty. Along with the promoters, Babu K. Shetty, Vittala K. Bhandary, and SAMS Industries Limited. The promoters will be seeling more than 81.22 lakh equity shares. Fresh problem portion of the IPO will be worth Rs 60 crore. Heranba will only be getting this portion of the problem quantity. The firm, in its RHP, stated that the firm plans to use the quantity to fund working capital needs and to fund expenditures for common corporate purposes
Investors can bid for the problem in the price tag band of Rs 626-627 per share. The minimum bid size has been decided at 23 equity shares and multiples thereafter. This would translate into a minimum bid price tag of Rs 14,421. The problem opens for subscription on February 23 and closes on February 25. 50% of the problem will be reserved for Qualified Institutional Buyers (QIB), 15% will be accessible for Non-Institutional Investors (NII) and the remaining 35% is for Retail investors.
Axis Capital in a note earlier stated that the FY20 EPS of the firm is Rs 25.03, with a return on net worth of 30.47%. Peers such as Rallis India and Sumitomo Chemicals presently trade at a P/E ration of 29.67 and 72.11.
Heranba Industries earns 49% of its income from exports, whereas 87% of the income comes from institutional shoppers. The firm has a diverse buyer base with only 20% of the total income coming from the top rated 10 shoppers. The firm exported their goods to more than 60 nations in Latin America, CIS, Middle East, Africa, Asia and South East Asia in the earlier fiscal year. Heranba’s management stated that it has began the approach of getting into created markets such as the USA and Europe.