Sharda Cropchem Ltd IPO Review (Subscribe)

Review By Dilip Davda on Aug 29, 2014

Sharda Cropchem Ltd (SCL) is a crop protection chemical company engaged in the marketing and distribution of a wide range of formulations and generic active ingredients globally. It is also involved in order based procurement and supply of Belts, general chemicals, dyes and dye intermediates. Over the years the company has primarily, grown organically and its core strength lies in identifying generic molecules, preparing dossiers, seeking registrations, marketing and distributing formulations or generic active ingredients in fungicide, herbicide and insecticide segments. It has also recently entered into the biocide segment and has acquired several registrations from the existing registration holders, primarily, in Europe. As of August 5, 2014, it had over 180 Good Laboratory Practices certified dossiers and as of July 15, 2014 it owned over 1,040 registrations for formulations and over 155 registrations for generic active ingredients across Europe, NAFTA, Latin America and Rest of the World. SCL’s library of dossiers gives it a competitive edge and facilitates us in seeking registrations in different countries in a time efficient manner. This also fosters its ability to operate in and distribute diversified range of formulations and generic active ingredients globally including highly regulated markets, which would not be permitted without such registrations. As of August 5, 2014, it has filed over 500 applications for seeking registrations globally which are pending at different stages. 

 

To achieve the benefits of listing the Equity Shares on the BSE and the NSE the company is coming out with an offer for sale of 22,555,124 Equity Shares of Rs. 10 each at a price range of Rs. 145-156 by the Selling Shareholders resultantly the company will not receive any proceeds from the Offer. Based on lower and upper price band, offerors’ hopes to raise Rs. 327.05 to Rs. 351.86 crore. For the past three fiscals it has posted an average EPS of Rs. 10.31 with gradual rise in top and bottom lines. Its RoNW for past three years has been at an average of 18.61%. Its NAV stands at Rs. 61.28 as on 31.03.14. Existing equity of company includes two bonus issues in the ratio of 10 for 1 in March 2007 and 4 for 1 in June 2011. This issue has 35% quota for retail investors. Minimum application is to be made for 90 shares and in multiples thereof, thereafter. 

 

Issue is lead managed by Edelweiss Financial Services Ltd and IDFC Securities Ltd whereas Karvy Computershare Pvt Ltd is the registrar to the issue. Issue opens for subscription on 05.09.14 and will close on 09.09.14. Shares will be listed on BSE and NSE. This offer consists of 25% dilution of equity. Based on EPS of Rs. 11.85 for 2013-14 the asking price is at a P/E of around 13 that augurs well against current P/Es of peers that is ranging from 14 to 30.


Conclusion / Investment Strategy

 

On merchant banker’s front, both have positive bias on their past mandates. As such issue can be considered for medium to long term investment. 

 

Remark: Apply

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Aug 29, 2014

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. Any reader taking decisions based on any information published here does so entirely at its own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

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

Sharda Cropchem IPO FAQs

  1. 1. Why Sharda Cropchem IPO?

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

  2. 2. How is Sharda Cropchem IPO?

    Read the Sharda Cropchem IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Sharda Cropchem IPO what should investors do?

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

  4. 4. Is Sharda Cropchem IPO good?

    Our recommendation for Sharda Cropchem IPO is to subscribe.

  5. 5. Is Sharda Cropchem IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Sharda Cropchem IPO.

  6. 6. When will Sharda Cropchem IPO allotment status?

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

  7. 7. When will Sharda Cropchem IPO list?

    The Sharda Cropchem IPO will list on Tuesday, September 23, 2014, at BSE, NSE.
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