Heranba Industries Ltd IPO
23rd Feb, 2021
About the Company:
The company was incorporated back in 1992, Heranba Industries Ltd is a Gujarat based crop protection chemical manufacturer.
It domestically produces many chemical compounds used to control pest in farms, homes, restaurants, hospitals and schools. It also makes herbicides, fungicides and public health products for pest control.
Heranba has a fully integrated and modern manufacturing facility with an in-house research and development unit. The company has three independent manufacturing units.
In India it as 8600 dealers across 16 states and 1 union territory whereas it exports to more than 60 nations through international distribution partners.
About the IPO
The IPO of Heranba Industries Ltd aims at raising INR 625.24 crores out of which the fresh issue is INR 60 crores and the remaining will be raised through an offer for sale of shares. The IPO will open for subscription on 23rd February (Tuesday) and close on 25th February (Thursday). The price band has been fixed at ₹626 to ₹627 with the minimum lot size of 23 shares. This means one has to pay at least ₹14,421 to bid for the issue.
Emkay Global Financial Services and Batlivala & Karani Securities India are the leading book managers for the issue while Bigshare Services is the registrar of the issue.
Heranba Industries Ltd IPO Details
| IPO Date | 23rd February, 2021 to 25th February, 2021 |
|---|---|
| Issue Type | Book Built Issue IPO |
| Issue Size | Eq Shares of ₹10 (aggregating up to ₹625.24 Cr) |
| Fresh Issue | Eq shares of ₹10 (aggregating upto ₹60 Cr) |
| Offer For Sale | 90,15,000 Eq shares of ₹10 |
| Face Value | ₹10 per equity share |
| IPO Price | ₹626 to ₹627 per equity share |
| Market Lot | 23 Shares |
| Min Order Quantity | 23 Shares |
| Listing at | BSE, NSE |
Heranba Industries Ltd IPO Tentative Timetable
| Bid/Offer Opens On | 23rd Feb, 2021 |
| Bid/Offer Closes On | 25th Feb, 2021 |
| Finalisation of Basis of Allotment | 2nd Mar, 2021 |
| Initiation of Refunds | 3rd Mar, 2021 |
| Credit of Shares to Demat Acct | 4th Mar, 2021 |
| IPO Shares Listing Date | 5th Mar, 2021 |
Lot Size And Price
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Minimum | 1 | 23 | ₹14,421 |
| Maximum | 13 | 299 | ₹1,87,473 |
Promoter Holding
| Pre Issue Share Holding | 98.1% |
|---|---|
| Post Issue Share Holding | 74.1% |
Objective of the issue:
The main objectives of the issue are:
- To meet the business working capital requirements.
- To meet the general corporate expenses.
- To meet public issue expenses.
Important Finances
Summary Of Financial Information
| Particulars | For the year (₹ in million) | ||
|---|---|---|---|
| 31-Mar-20 | 31-Mar-19 | 31-Mar-18 | |
| Total Assets | 6,247.63 | 5,604.43 | 4,504.65 |
| Total Revenue | 9,679.06 | 10,118.38 | 7,504.10 |
| Profit After Tax | 977.50 | 754.20 | 468.76 |
Company's Strength:
- The company has dominated the pyrethroids market with a share of 19.5% (2019) of the total market size.
- The consumption of pyrethroids is expected to grow by around 20% CAGR between 2020 and 2025.
- Given the increasing Indian agrochemical market along with Heranba's expanding geographical footprint, the company has a good scope for expansion.
- The company has zero long term debt in its books as of September 2020 and has only a working capital debt of about INR 38 crore.
Risks:
- The company faces a high risk due to shoot up in raw material prices which forms a whopping 70% of its expenses.
- It also faces steep competition from peers like Rallis India, Bharat Rasayan and Sumitomo Chemicals.
Our Outlook:
The company is financially sound and has a robust business model, hence we would recommend subscribing in this issue for listing gains.Investors can also invest in this company with a long term perspective.
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