India Pesticides files IPO papers with Sebi, plans to launch Rs 800-crore public issue

Agrochemical technicals company India Pesticides Ltd has filed preliminary papers with capital markets regulator Sebi. The Uttar Pradesh-based company looks to raise Rs 800 crore through an initial public offering which comprises fresh issue of shares worth Rs 100 crore and an offer of sale (OFS) of Rs 281.4 crore by promoter Anand Swarup Agarwal and Rs 418.6 crore by selling shareholders, according to draft red herring prospectus. The equity shares are proposed to be listed on BSE and NSE.

The company and selling shareholders in consultation with book running lead managers may consider a further pre-IPO placement issue of Rs 75 crore. The company in DRHP said that if the pre-IPO placement takes place then the amount raised from the pre-IPO placement will be reduced from the fresh issue. The book running lead managers to the issue are Axis Capital Ltd and JM Financial Ltd, while the registrar to the offer is KFin Technologies Private Ltd. The company is the sole Indian manufacturer and among top five manufacturers globally for several Technicals, such as, Folpet and Thiocarbamate Herbicide, used to make herbicide, insecticide and fungicides that control fungal growth across a variety of crops.

India Pesticides listed peers include Dhanuka Agritech Ltd, Bharat Rasayan Ltd, UPL Ltd, Rallis India Ltd, PI Industries Ltd, Sumitomo Chemical India Ltd and Atul Ltd, have respective P/E ratios at 26.08. 27.46, 24.15, 30.41, 66.56, 76.67 and 29.26. The company in DRHP stated that the proceeds of the OFS will be received by the selling shareholders. The Company will not receive any proceeds from the OFS. As for the fresh issue, India Pesticides has planned to utilise the net proceeds for funding working capital requirement of the company, and general corporate purposes. India Pesticides currently operates from two manufacturing facilities located at Dewa Road, Lucknow and Sandila, Hardoi in Uttar Pradesh, with an aggregate capacity of 19,500 MT for technicals and 6,500 MT for the formulations vertical.

It also manufactures active pharmaceutical ingredients (APIs) and has obtained a license for manufacturing two drugs for sale at Dewa Road from the Drug Licensing and Controlling Authority. For the six months ended September 30, 2020, India Pesticides posted a profit of Rs 72.3 crore while for the financial year 2020, it reported a profit of Rs 70.58 crore.