Agro Phos - NSE SME IPO review (Subscribe)

Review By Dilip Davda on Oct 21, 2016

Agro Phos India Ltd (APIL) is engaged in the manufacturing of fertilizers such as Single Super Phosphate (SSP), Nitrogen Phosphate and Potassium (NPK), Zinc Sulphate, Organic Manure and Calcium Sulphate (Gypsum). It also trades in Di-ammonium Phosphate (DAP), Urea, Ammonium Sulphate and other fertilizers. APIL also participates in various awareness programs for farmers.

To part finance repayment/prepayment of certain borrowings, working capital requirements and other general corpus fund needs, the company is coming out with a maiden IPO of 5880000 equity shares of Rs. 10 each via book building route in a price band of Rs. 19-22 to mobilize Rs. 11.17 crore to Rs. 12.94 crore (based on lower and upper price bands). Minimum application is to be made for 6000 shares and in multiples thereon, thereafter. Issue opens for subscription on 27.10.16 and will close on 07.11.16. Having issued equity shares at par between 2002-2006 it issued further equity at a price of Rs. 30 to Rs. 100 per share. It has also issued bonus shares in the ratio of 4 for 5 in June 2014 and in the ratio of 4 for 1 in Sept. 2016. Post IPO, its current paid up equity capital of Rs. 14.39 crore will stand enhanced to Rs. 20.27 crore. Post allotment, shares will be listed on NSE SME Emerge platform. The issue is jointly managed by Pantomath Capital Advisors Pvt Ltd and Indian Overseas Bank. Bigshare Services Pvt Ltd is the registrar to the issue.

On performance front, APIL has posted turnover/net profits of Rs. 58.59 cr. / Rs. 1.37 cr. (FY13), Rs. 62.29 cr. / Rs. 1.28 cr. (FY14), Rs. 65.80 cr. / Rs. 10.08 cr. (FY15) and Rs. 72.77 cr. / Rs. 3.53 cr. (FY16). For the first month of current fiscal, it has posted turnover of Rs. 3.65 crore with a net profit of Rs. 0.07 crore. One month’s working does not give clear picture for such companies with seasonal business that largely depends on monsoon. Hence if we consider FY 16 earnings, then asking price is at a P/E of 11 to 13 (based on lower and higher price bands). That augurs well compared to industry composite P/E of 30 plus.

On merchant bankers’ front, this is 29th Mandate from Pantomath and 3rd mandate from Indian Overseas Bank. As expressed in the RHP Pantomath’s last 10 listings and Indian Overseas Bank’s 2 listings have given positive rewards on the listing date

Conclusion: This justifiably priced IPO may be considered by cash surplus investors for long term rewards as there is a sudden spurt in paid up equity due to bonus issues and the IPO.


Conclusion / Investment Strategy

This justifiably priced IPO may be considered by cash surplus investors for long term rewards as there is a sudden spurt in paid up equity due to bonus issues and the IPO.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Oct 21, 2016

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the past, SME IPOs drew the attention of investors across the board. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at own risk. The above information is based on information available as on date coupled with market perceptions. The Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com

Agro Phos India IPO FAQs

  1. 1. Why Agro Phos India IPO?

    The initial public offer (IPO) of Agro Phos India Ltd offers an early investment opportunity in Agro Phos India Ltd. A stock market investor can buy Agro Phos India IPO shares by applying in IPO before Agro Phos India Ltd shares get listed at the stock exchanges. An investor could invest in Agro Phos India IPO for short term listing gain or a long term.

  2. 2. How is Agro Phos India IPO?

    Read the Agro Phos India IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Agro Phos India IPO what should investors do?

    Agro Phos India IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Agro Phos India IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.

  4. 4. Is Agro Phos India IPO good?

    Our recommendation for Agro Phos India IPO is to subscribe.

  5. 5. Is Agro Phos India IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Agro Phos India IPO.

  6. 6. When will Agro Phos India IPO allotment status?

    The Agro Phos India IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Agro Phos India IPO allotment status to check.

  7. 7. When will Agro Phos India IPO list?

    The Agro Phos India IPO will list on Wednesday, November 16, 2016, at NSE SME.

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