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The initial public offering of Nova Agritech Ltd, a manufacturer of agricultural inputs, saw a blockbuster response on Day 1 itself, as it was subscribed 9.71 times. The IPO received bids for 24.68 crore shares against 2.54 crore shares on offer.
The IPO, which closes on Thursday, comes at a price band of ₹39-41. Investors can bid for a minimum of 365 shares.
While not more than 50 per cent is reserved for institutional investors, retail investors and HNIs can bid a minimum of 35 per cent and 15 per cent respectively of the issue.
The category for non-institutional investors received 14.66 times subscriptions, while the portion for retail individual investors subscribed 12.71 times. Qualified institutional buyers (QIBs) part got subscribed 62 per cent.
The ₹143.81-crore IPO from the soil health management, crop nutrition and crop protection products company consisted of a fresh issue of ₹112 crore and an offer-for-sale (OFS) of up to 77,58,620 shares (worth ₹31.81 crore) by the selling shareholder Nutalapati Venkatasubbarao.
The stock is proposed to be listed on the BSE and NSE.
Anchor investors
On Friday, the company raised ₹43.14 crore from anchor investors, as part of IPO fundraising exercise.
The company has allocated about 1.05 crore shares at ₹41 a share to anchor investors, who included Quantum-State Investment Fund, Neomile Growth Fund, AG Dynamic Funds limited and Saint Capital Fund.
Utility of funds
The company plans to use the net proceeds worth ₹14.20 crore for investment in its subsidiary Nova Agri Sciences to set up a new formulation plant, ₹10.49 crore for funding capital expenditure by Nova Agritech and towards expansion of its existing formulation plant.
The company will utilise ₹26.65 crore for funding the working capital requirements of Nova Agritech and ₹43.36 crore for investment in Nova Agri Sciences’ working capital requirements.
The 16-year-old company, founded by Sambasivarao Yeluri and Kalyana Chakravarthy, manufactures, distributes, and markets soil health management products; crop nutrition products; bio stimulant products; bio pesticide products; Integrated Pest Management (IPM) products; and crop protection products.
The company registered a revenue of ₹210.55 crore in the financial year 2022-23, showing a growth of 13.47 per cent over the previous year’s revenue of ₹185.56 crore. “The net profit increased by 49.69 per cent to ₹20.49 crore in 2022-23 from ₹13.69 crore in the previous year,” it said.
For the six months ending September 30, 2023, the company clocked a revenue of ₹103.22 crore and a net profit of ₹10.38 crore.
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