The Rs 1,500 crore IPO of Paradip Phosphates opens on May 17 and closes on May 19. price band is fixed 39-42 per share. Fertilizer company Paradip Phosphates picked up a bit before the IPO opened 450 crore from anchor investors 42 each. Goldman Sachs, BNP Paribas Arbitrage, Kuber India Fund, Kopathal Mauritius Investment and Societe Generale are among the anchor investors.
10 things to know about Paradip Phosphate IPO
The Government of India will sell its entire 19.55% stake in the company. At present, ZMPPL (Zuari Maroc Phosphates Pvt Ltd) holds 80.45% stake and Government of India holds the remaining 19.55 percent stake in the company.
offer for sale ( 500 crore) consists of 6,018,493 equity shares held by Zuari Maroc Phosphates Pvt Ltd and 112,489,000 equity shares by the President of India, acting through the Ministry of Chemicals and Fertilizers, Government of India.
Proceeds of fresh issue ( 1,000 crore) will be used partly for acquisition of fertilizer manufacturing facility in Goa and payment of debt and for general corporate purposes.
Paradip Phosphate Primarily engaged in manufacturing, trading, distributing and selling various types of complex fertilizers like Di-Ammonium Phosphate (DAP) and NPK fertilizers. Paradip Phosphates Limited (PPL) is the second largest private sector manufacturer of non-urea fertilizers in India and the second largest private sector manufacturer in terms of DAP volume sales for the nine months ended December 31, 2021.
Its fertilizers are marketed under some of the leading brand names in the market – ‘Jai Kisan-Navratna’ and ‘Navratna’.
Lot Size: Bid can be made for a minimum of 350 equity shares and thereafter in multiples of 350 equity shares.
As per Kotak Securities, Paradip Phosphates has established a track record of delivering strong financial performance. Its total income for the nine months ended December 31, 2021 and for the financial years 2021, 2020 and 2019 was 5973.69 crore, 5183.94 crore, 4227.78 crore and 4397.21 crore, respectively, while
Its profit for the period/year was 362.78 crore, 223.27 crore, 193.22 crore and 158.96 crores respectively. Its EBITDA for the nine months ended December 31, 2021 and fiscal years 2021, 2020 and 2019 was 593.06 crore, 561.26 crore, 493.83 crore and 480.75 crores respectively.
Choice Broking has given a subscribe rating to the issue. “At the higher price band of Rs. 42, PPL is seeking an EV/sales multiplier of 0.7x FY11, which is at a significant discount from the equivalent average of 10.1 times. Keeping in view the above observations, we are looking for this provide a “Subscribe” rating for the issue,” the brokerage said in a note.
Domestic brokerage Angel One has given a neutral rating on the issue. “In terms of valuations, the stock will trade at post-P/E multiples of 15.3xFY2021 EPS (at the upper end of the issue price band), which is in line with other players like Chambal Fertilizers and Deepak Fertilizers, though they may not be strictly comparable. Given the fact that the company is valued at par with competitors and is likely to face adverse conditions in terms of cost pressures due to the recent rise in raw material prices, we recommend a neutral rating on the issue “