Dharmaj Crop Guard IPO Listing: Shares of Dharmaj Crop Guard made its debut on Thursday on a strong note with a listing at Rs 266 on BSE, a premium of 12 per cent over its issue price of Rs 237 apiece.
The Rs 251 crore public issue of Ahmedabad-based Dharmaj was subscribed 35.5 times during November 28-30, with qualified institutional buyers and high net worth individuals bidding for 48 times and 52 times their respective allotted quota. Retail investors put in bids for 21.5 times the shares in the portion reserved for them. The price band for the offer was Rs 216-237 per share.
Considering better utilisation of the IPO proceeds and reasonable valuations, he expects the listing would be at Rs 280-290 levels, which translates to a premium of 18-22 per cent over the upper end of the IPO’s price band. The bulk of the IPO proceeds will be used to fund the setting up of a manufacturing facility in Gujarat and working capital requirements.
Dharmaj Crop manufactures agrochemical formulations such as insecticides, fungicides, herbicides, plant growth regulators, micro fertilisers and antibiotics. It has strong R&D capabilities with a focus on innovation and sustainability.
At the upper end of the price band, the IPO was at 27.9x its FY22 earnings and 9.4x to P/BV with a market capitalisation of Rs 801 crore.
Dharmaj has consistently been reporting healthy growth in earnings with profit in FY22 rising 37 per cent to Rs 28.69 crore and revenue from operations increasing 70 per cent to Rs 219.54 crore.
What should investors do?
Santosh Meena, Head of Research, Swastika Investmart Ltd., said “Dharmaj debuted on the secondary market with a gain of around 15%, which is in line with market expectations. However, the long-term outlook remains positive, and the valuations are still reasonable, so investors can continue to hold this stock, while those who applied for listing gains can maintain a stop loss of Rs. 255."
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