Heranba Industries IPO: Key things to know before subscribing
The company will raise the money through an Offer for Sale (OFS) of up to 90,15,000 equity shares.
Gujarat-based crop protection chemicals manufacturer Heranba Industries will hit the capital market on February 23 to raise up to Rs 625 crore. The company has fixed a price band of Rs 626-627 per share.
The IPO will close on February 25 and the portion for anchor investors will be open on February 22. Here are 10 things to know before subscribing to the issue:
About the company: Heranba Industries is a crop protection chemical manufacturer, exporter and marketing company based out of Vapi, Gujarat, with Corporate and Administration Offices in Mumbai. It manufactures intermediates, technicals and formulations and is one of the leading domestic producers of synthetic pyrethroids like cypermethrin, alphacypermethrin, deltamethrin, permethrin, lambda-cyhalothrin etc. Its pesticides range includes insecticides, herbicides, fungicides and public health products for pest control.
About the issue: The company will raise the money through an Offer for Sale (OFS) of up to 90,15,000 equity shares.
Objective of the issue: The funds raised through the IPO will be utilised to finance the company’s working capital requirements and general corporate purposes.
Listing: Shares of the company will be listed on NSE and BSE.
BRLM: The Book Running Lead Managers (BRLM) to the IPO are Emkay Global Financial Services Ltd and Batlivala and Karani Securities India.
Financials: Heranba Industries recorded revenues of Rs 967.90 crore and a profit after tax of Rs 97.75 crore in FY20. It has three manufacturing plants and has over 9,400 dealers. It also exports to more than 60 countries.
Brokerage take: Anand Rathi Shares and Stock Brokers has given ‘Subscribe’ rating to the issue. “At the upper end of the IPO price band, it is offered at 22.67x its TTM EPS earnings, with a market cap of Rs 2,509 crore. Considering the company’s dominant position in pyrethroids market, strong balance sheet, high return on net worth of 30.47% as per FY20 financial statements, strong management and reasonable valuations; we give this IPO a ‘Subscribe’ rating,” the brokerage said.
Marwardi Shares and Finance also gave ‘Subscribe’ call to the issue. “Considering FY 20 adjusted EPS of 24.43 on a post-issue basis, the upper price band implies a P/E ratio of 25.67x. Seeing the future prospects of the company, sustainable and growing financial statements of the past years, we see the company’s price band is at a reasonable valuation,” Marwardi Shares and Finance said in a note.