On the back of strong R&D and distribution network across the country, growth plans, reasonable valuations as compared to peers, positive economic conditions and good financials, six brokerages are bullish on the IPO of Gujarat-based Dharmaj Crop Guard Ltd.
According to Anand Rathi Share and Stock Brokers Ltd, the company has a diversified portfolio of products and consistent focus on quality and innovation. It said that the company has strong R&D capabilities with focus on innovation and sustainability.
"In addition to this, the government’s aim to reduce dependency on China, and improve self-sufficiency is expected to support industry’s backward integration and thus its growth," added Anand Rathi.
It has a "subscribe" rating on the IPO due to the company's promising future.
Similarly, on the backdrop of government initiatives and various schemes auguring better growth potential for the agriculture sector, brokerage Canara Bank Securities Ltd recommends 'subscribing for listing as well as long term gains' to the issue.
Further, Canara Bank Securities said that on valuation front, the issue is priced at PE of 20.40x to its FY22 earnings, which seems to be attractive in comparison to its peers.
The brokerage is also impressed about the fact that the company has a huge export market, where it exports its products to more than 25 countries in Latin America, East Africa, Middle East and Far East Asia.
Choice Equity Broking Pvt Ltd has assigned a 'subscribe with caution' rating for the issue, after considering the growth outlook and its ability to expand the profitability margin post the commissioning of the agrochemical technical facility (around H2 FY24).
Brokerage firm BP Equities Pvt Ltd, which has recommend a 'subscribe' rating for the benefit of listing gains, said that the company's objectives are to further diversify its clientele and boost its market position in the agrochemical industry.
The company focuses on growing its product portfolio mix and strengthening its business through effective branding of its own items in order to accomplish this goal.
Additionally, the construction of the new factory will improve the company's manufacturing capacity and increase profit margins thanks to backward integration.
A low level of capacity utilisation of about 35 percent in FY2022, however, continues to be a major worry for the business, believes the brokerage.
Marwadi Financial Services has also assigned the IPO a "subscribe" rating due to the company's extensive distribution network, strong brand-named products, and long-standing relationships with institutional clients. It is priced reasonably compared to its competitors, believes the brokerage.
On the back of steady growth in both revenue and profit, and profit margins rising continuously in a tough environment, brokerage Swastika Investmart Ltd has assigned 'subscribe' rating to the IPO.
The agrochemical-based company, which filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) in January 2022, opened the issue for subscription on Monday. The issue will remain open till Wednesday, November 30.
The company has set the price band for its initial public offering at ₹216-237 per share having a face value of ₹10 each.
A fresh issue of equity shares worth 216 crore rupees, and an offer-for-sale of up to 1,483,000 equity shares by current shareholders make up the issue.
The net proceeds of the fresh issue will be utilised to fund capital expenditure towards setting up of a manufacturing facility at Saykha, Bharuch, Gujarat, working capital requirements, repayment or pre-payment of loans and general corporate purposes.
Elara Capital and Monarch Networth Capital are the book running lead managers to the issue.