Paradeep Phosphates IPO: Everything you have to know

Paradeep Phosphates IPO: The preliminary public providing (IPO) of fertilizer firm Paradeep Phosphates opened for subscription on Tuesday, May 17, 2022. The supply was subscribed 29 per cent by the tip of the primary day of bidding.

It acquired whole bids for 7,86,87,000 shares throughout each the inventory exchanges in opposition to 26,86,76,858 shares on supply, knowledge from National Stock Exchange (NSE) confirmed.

The Rs 1501.73 crore Paradeep IPO might be out there for subscription until Thursday, May 19, 2022, and the value band of the corporate has been fastened at Rs 39-42 per share.

Paradeep IPO contains a recent difficulty of shares value Rs 1,004 crore and an offer-for-sale (OFS) of 11.85 crore fairness shares by promoters and different promoting shareholders.

As a part of the OFS, Zuari Maroc Phosphates Pvt Ltd (ZMPPL) will offload 60,18,493 fairness shares and the federal government of India will promote as much as 11,24,89,000 fairness shares. The authorities might be offloading its total 19.55 per cent stake within the firm.

At current, ZMPPL holds 80.45 per cent and the federal government of India owns the remainder 19.55 per cent stake within the firm.

Paradeep Phosphates is primarily engaged in manufacturing, buying and selling, distribution and gross sales of quite a lot of advanced fertilizers akin to Di-Ammonium Phosphate (DAP) and NPK fertilizers. Its fertilizers are marketed beneath a few of the key model names available in the market – ‘Jai Kisaan – Navratna’ and ‘Navratna’.

The web proceeds from the recent difficulty might be used for half financing of the acquisition of the Goa facility, reimbursement/prepayment of sure borrowings and for common company functions, in response to the main points given within the pink herring prospectus (RHP).

Half of the problem dimension has been reserved for certified institutional consumers (QIBs), 15 per cent for non-institutional buyers and the remaining 35 per cent for retail buyers.

Investors who want to subscribe to Paradeep IPO can bid in a number of 350 fairness shares and multiples thereafter. At the higher worth band, they are going to be shelling out Rs 14,700 to get a single lot of Paradeep Phosphates. The shares might be listed on each BSE in addition to the NSE.

The candidates additionally should word that the cut-off time for UPI mandate affirmation is Friday, May 20, 2022, upto 12:00 pm. If they fail to take action then their utility is probably not thought of.

Axis Capital, ICICI Securities, JM Financial and SBI Capital Markets are the guide operating lead managers to the supply whereas Link Intime India is the registrar of the problem.

Before heading into the IPO, Paradeep Phosphates on Friday raised over Rs 450.51 crore (Rs 4,50,51,94,386.00) from 20 anchor buyers in lieu of 10,72,66,533 fairness shares at Rs 42 every, knowledge from the inventory exchanges confirmed.

The anchor buyers comprise of Goldman Sachs, BNP Paribas Arbitrage, Kuber India Fund, Copthall Mauritius Investment, Societe Generale, ICICI Prudential Mutual Fund (MF), Nippon India MF, SBI MF, Tata MF, HDFC MF, DSP MF and Mirae MF amongst others.

The analysis groups at Geojit Financial Services and IIFL Securities of their respective IPO notes gave a “Subscribe” score to the supply.

IIFL Research in its report famous, “At the upper price band of ₹42, Paradeep Phosphates Limited is demanding a P/E multiple of ~11X based on FY21 earnings while the company’s price to sales ratio is at 0.66X of FY21 revenue. The industry average PE multiple is 15.73X of FY21. Considering the favorable Indian fertilizer industry dynamics, it being one of the market leaders in Phosphatic fertilizers in India, its plans to improve cost efficiencies, and its plans to expand distribution channels, we recommend ‘Subscribe’ to the issue, with long term perspective.”

Geojit Research in its IPO word stated, “At the upper price band of Rs.42, PPL is available at P/E of 7.1x (FY22 annualized) which is attractive on a short to medium term basis. PPL is well-positioned to capture favourable Indian fertilizer industry dynamics supported by conducive government regulations, driving raw material efficiency through backward integration of facilities and effective sourcing and established brand name backed by an extensive sales and distribution network. Considering PPL’s expansion plans, deepening the presence in western and southern regions of India, we assign a ‘Subscribe’ rating for the issue on a short to medium basis.”

The share allotment is prone to happen on Tuesday, May 24, 2022, and the shares are anticipated to be listed on Friday, May 27, 2022, in response to the timeline given within the RHP.