Latest Market Updates : On Tuesday, January 23, subscriptions for Nova Agritech Limited’s (NATL) initial public offering (IPO) will be accepted. Due to the market holiday on January 22, the public offer was delayed by one day and was scheduled to end on January 25. The company’s shares are fetching ₹20 premium in the unlisted market ahead of the issue launch.
With 365 equity shares in a single lot and its multiples thereafter, Nova Agritech has set its pricing range at ₹39–41 per share.
How should investors proceed?
According to analysts at Swastika Investmart, the company has a strong global footprint and is well-positioned for future growth because to its successful marketing approach.
“Nova has demonstrated remarkable financial performance over the last three years, with steady growth and well-defined development plans. But there are certain important concerns to take into account. The company’s operations are intrinsically dependent on weather patterns, and the majority of its income comes from a small geographic area. The brokerage responded, “We recommend’subscribe’ for listing benefits.”
Ventura Securities Take on Nova Agritech:
Research and development are given top priority at Nova AgriTech, which keeps an own R&D center and works with academic institutions.
“The Nova Kisan Seva Kendra (NKSK) initiative shows its dedication to reaching out to farmers. Educating farmers on crop management practices is the goal of the program, which is made up of several Kisan Sevaks and Mitras and 24 agri-graduate coordinators. With a ‘Subscribe’ rating on the IPO, the brokerage stated, “NKSK uses IOT-based solutions for precise farming inputs.”
Issue details
With the help of a new share sale valued at ₹112 crore and an offer-for-sale (OFS) of up to 77.58 lakh equity shares by Nutalapati Venkatasubbarao totaling ₹31.81 crore, the business hopes to generate ₹143.81 crore through the public offer.
Qualified institutional bidders (QIBs) will receive about 50% of the shares that are reserved, while non-institutional investors (NIIs) will receive 15% of the reservation in offer. Retail investors in the issue will receive the remaining 35% of the shares.
The proceeds of the new issuance, which total ₹14.20 crore, will be invested in its subsidiary Nova Agri Sciences to establish a new formulation facility. Additionally, ₹10.49 crore will be utilized to finance Nova Agritech’s capital expenditures and to expand its current formulation plant.
Additionally, ₹26.65 crore would be used by Nova Agritech to finance its working capital needs, while ₹43.36 crore will be invested in Nova Agri Sciences.
Prior to the opening of the offering, the company finalized the allocation of 1,05,22,220 shares at a price of ₹41 per share, and collected ₹43.14 crore from four anchor investors.
Company overview
One of the top producers of agricultural inputs, Nova Agritech focuses on crop nutrition, crop health management, and crop protection goods. The company emphasizes nutritionally balanced and environmentally sustainable goods that are developed via significant research and development, with an emphasis on technology-driven solutions.
With 720 registrations in several categories as of November 30, 2023, including soil health management, crop nutrition, biopesticides, and crop protection, NATL has a strong product portfolio.
Nova Agritech manages a vast dealer network including over 11,722 dealers located across 16 Indian states and 2 Nepalese states. The business has also increased its presence in Bangladesh, Sri Lanka, and Vietnam by means of supply agreements, distribution networks, and creative marketing.
The company’s revenue increased to ₹211 crore in fiscal FY23 from ₹186 crore in FY22, a 13% increase. In FY23, the net profit increased by 43% to ₹20.49 crore. In FY23, the company declared returns on equity (RoE) of 38.27% and return on capital employed (RoCE) of 27.25%. During that time, the debt to equity ratio was 1.11 times, and the net debt was ₹10.8 crore.
Bigshare Services is the registrant, and Keynote Financial Services and Bajaj Capital are the book-running lead managers for the IPO. Sanjay Singhania, Ajay DD Singhania, Laxmi Pat Bothra, and Bajrang Bothra are the company’s promoters.
The stock will be listed on the NSE and BSE on January 31, the basis of allotment will be finalized by January 29, shares will be credited to demat accounts by January 30, and the stock date will be January 31.