The price band of the issue has been set in the range of ₹39 to ₹41 per equity share of the face value of ₹2.
As a manufacturer of agricultural inputs, Nova Agritech specialises in crop protection, crop nutrition, and soil health management. Our tech-driven farmer-driven solution approach allows us to provide products that are both nutritionally balanced and environmentally sustainable, with a focus on research and development.
About the Nova Agritech IPO
The ₹143.81 crore Nova IPO comprises a fresh issue of ₹112 crore, and an offer-for-sale (OFS) of 77.58 lakh equity shares of ₹2 aggregating up to ₹31.81 crore by the selling shareholder, Nutalapati Venkatasubbarao.
The net proceeds of the issue will be used for the investment in the subsidiary Nova Agri Sciences Private Limited for the construction of a new formula factory, financing the company’s capital expenditures for the expansion of an existing formula plant, financing the company’s working capital needs and for general business purposes.
The firm has fixed a lot size of 365 equity shares and in multiples of 365 equity shares thereafter. Hence, at the upper price band, a retail investor will have to invest ₹14,965 for one lot.
The company has reserved not more than 50 percent of the shares in the public issue for qualified institutional buyers (QIB), not less than 15 percent for non-institutional Institutional Investors (NII), and not less than 35 percent of the offer is reserved for retail investors.
Keynote Financial Services Ltd and Bajaj Capital Limited are the lead managers for the Nova Agritech IPO, while Bigshare Services Pvt Ltd is the registrar for the issue.
Last week, the firm raised ₹43.14 crores from anchor investors. Foreign and Domestic Institutions who participated in the anchor were AG Dynamic Funds Limited, Neomile Growth Fund – Series I, Saint Capital Fund, and Quantum-State Investment Fund.
Nova Agritech IPO allotment date is most likely 29th January, 2024 whereas Nova Agritech IPO listing is likely to take place on 31st January, 2024.
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Nova Agritech subscription status
The issue continued to witness an overwhelming response on the final day of bidding as well. At 3:50 pm on Day 3 (January 25), the IPO was subscribed a massive 110.41 times. The NII portion was subscribed the most, 230.96 times, followed by the QIB quota, which was booked 80.60 times. Meanwhile, the retail investor part was bid 75.78 times.
Nova Agritech IPO was fully booked within the first hour of the IPO opening, on Day 1, due to an overwhelming response from retail and non institutional investors. It was subscribed 10.31 times on Day 1 and 35.32 times on Day 2.
Nova Agritech GMP today
The company’s shares were trading at a premium of ₹20 in the grey market today, the same since January 19. This indicates the stock will list at a 48.78 percent premium at ₹61.
However, one must note that grey market premium is only an indicator of how the company’s shares are performing in the unlisted market and can change quickly.
Nova Agritech: Key things to know from RHP
Diversified product portfolio: As per the RHP, the company informed that it has a diversified branded product portfolio and offers a varied range of products as a complete solution for agricultural requirements such as a comprehensive range of soil health management, crop nutrition and crop protection. We manufacture a wide range of product categories consisting of soil health management products such as organic fertilizers, bio fertilizers and soil conditioners; crop nutrition products, crop protection products such as insecticides, fungicides, herbicides and plant growth regulators. As on November 30, 2023, the firm has received a total of 720 product registrations.
Widespread dealer network: The firm markets, sells and distributes its wide range of products to farmers across India by the help of its distribution channel of dealers spread across various states. It has a total dealer network comprising of approximately 11,722 dealers out of which approximately 6,769 dealers are active. Its dealer network is currently spread across 16 states. The firm has also entered into marketing, distribution and supply agreements with certain third parties in Bangladesh, Sri Lanka and Vietnam and are currently awaiting the necessary permissions to start business in these jurisdictions.
Nova Kisan Seva Kendra: The firm runs a farmer outreach program called Nova Kisan Seva Kendra program (NKSK), through which it educates farmers on various crop management practices. As on November 30, 2023, its NKSK team compromises of 24 NKSK Coordinators. Apart from the NKSK Coordinators, the firm also has arrangements with individuals across various states who provide their services as Kisan Mitras, and Kisan Sevaks catering to the needs of the farmers. As on November 30, 2023, the Company is associated with 96 Kisan Mitras and 142 Kisan Sevaks at a grassroots level. The key objective of NKSK is to provide farmers with need-based solutions, products, technologies, methodologies, know how, and usage skills thereby enhancing farm yield.
Research & Development facility: The RHP informed that Nova has a dedicated in-house R&D facility and a Quality Control/Quality Assurance facility at its manufacturing facilities to support technology transfer for new products and an on-site process improvement incubation center. It also has tie-ups with various universities to get access to process know-how, innovation, R&D, knowledge transfer, technology transfer, product transfer, credit support, manpower, development, etc. It has taken on lease 67.13 acres of land at Valaparla Village, Andhra Pradesh as a part of R&D wherein it tests the efficacy of its products on various crops.
Financials: The firm’s profit for the year FY23 increased by 49.69 percent to ₹20.49 crore from ₹13.69 crore in FY22. Meanwhile, its revenue from operations rose 13.47 percent to ₹210.55 crore in FY23 from ₹185.56 crore in FY22. The increase in revenue was on account of an increase in business volumes on the back of Technical Import registrations, foraying into new states like Tamil Nadu and consolidation of business in existing states namely, Telangana, Andhra Pradesh and Karnataka.
Seasonality of business: The company’s business exhibits seasonality with relatively higher revenues recorded during the months of September to February periods compared to other periods. The seasonality in business is overcome by covering planning sales on kharif, rabi and summer crops and targeting different crops across the year like paddy, cotton, chillies and horticultural crops to ensure business flows without a break throughout the year, said the RHP.
Industry overview: Agriculture is the primary source of livelihood for about 58 percent of India’s population. As a result, the share of agriculture and allied sectors to the total economy’s Gross Value Added (GVA) has been significant and has increased over the years. During the five-year period 2018-19 to 2022-23, the GVA for agriculture increased at a CAGR of 4.3 percent from ₹18.87 lakh crore in 2018-19 to ₹22.34 lakh crore in 2022-23.
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Published: 25 Jan 2024, 05:10 PM IST