The IPO season has again made a comeback to the stock market. After the state insurer LIC IPO made its market debut last week, a number of companies set to get listed are geared up to release their IPOs, while some have already shared the details.
Here, we give out more information on Paradeep Phosphates IPO, which will be launched on May 17.
Let’s dwell deeper and get some more information about its operations to help you decide if this IPO is worth your money or not!
Company overview
The cornerstone of Paradeep Phosphates Limited was established in 1981 as a private limited company.
It is engaged in the manufacturing, distribution, trading, and sales of a variety of complex fertilisers. The company’s products are marketed under some of the notable brand names present in the market, namely “Jai Kisaan – Navratna” and “Navratna.”
Paradeep Phosphates happens to be the third-largest entity in the private sector manufacturers providing non-urea fertilisers in India. Also, its DAP volume sales have put it in the position of the second-largest entity in the segment.
Pioneer of complex fertilisers
With an annual turnover of over Rs. 5,000 crore, Paradeep Phosphates has emerged as one of the industry’s most dominating and capable entities.
The company undertakes from manufacturing to sales of complex fertilisers such as DAP, three grades of Nitrogen-Phosphorus-Potassium, Zypmite, Phospho-gypsum, and Hydrofluorosilicic Acid.
The company’s manufacturing unit is situated in Paradeep, Odisha, from where it powers the production of DAP and NPK production facility, a Sulphuric acid production plant, and a Phosphoric acid production plant.
Competitive edge
The company established an extensive sales and distribution network, with a strong presence in the eastern part of India. As of March 31, 2022, Paradeep Phosphates distributed products across 14 states in India through the network of 11 regional marketing offices and 468 stock points.
As of March 31, 2022, the company's network includes 4,761 dealers and over 67,150 retailers serving over five million farmers in India.
Paradeep Phosphates listing details
Paradeep Phosphates Limited initial public offering of ₹ ₹1,501.73 crore will hit the market for subscription on Tuesday, May 17, 2022 and close on Thursday, May 19, 2022.
The price band of the offer has been fixed at ₹39-42 per equity share of face of ₹10 each. Bids can be made for a minimum of 350 equity shares and in multiples of 350 thereafter.
The issue comprises fresh issue of equity shares face value 10 each share aggregating to ₹1,004 crore and offer for sale up to 118,507,493 equity shares by Promoter and existing shareholders.
Axis Capital, ICICI Securities, JM Financial and SBI Capital Markets are the book running lead managers and Link Intime India Private Ltd will be the registrar to the issue.
IPO Timeline
| Event | Indicative Date |
| IPO Opening Date | May 17, 2022 |
| IPO Closing Date | May 19, 2022 |
| Basis of Allotment | May 24, 2022 |
| Initiation of Refunds | May 25, 2022 |
| Credit of Shares to Demat | May 26, 2022 |
| IPO Listing Date | May 27, 2022 |
Objective of Issue
The net proceeds of the Fresh Issue are proposed to be utilised in the following manner:
- Part-financing the acquisition of the Goa Facility.
- Repayment/prepayment of certain of our borrowings.
- General corporate purposes.
Financials of Paradeep Phosphates Limited
A quick glance at the financial performance of Paradeep Phosphates over the last three years highlights the fact that there has been significant growth in revenue.
| Particulars (In INR Cr) | For the year/period ended ( ₹ in Millions) | |||
| 31-Dec-21 | 31-Mar-21 | 31-Mar-20 | 31-Mar-19 | |
| Total Assets | 71,862.67 | 44,231.67 | 50,103.25 | 56,276.58 |
| Total Revenue | 59,736.88 | 51,839.41 | 42,277.76 | 43,972.13 |
| Profit After Tax | 3,627.84 | 2,232.68 | 1,932.20 | 1,589.63 |
| Source: RHP | ||||
Peer Comparison
| Company Name | Total income ( ₹ in million) | Face Value per equity share (Rs) | P/E | EPS (Basic) (Rs) | EPS (Diluted) (Rs) | RoNW (%) | NAV Per Equity Share (Basic) Rs |
| Coromandel International | 1,42,570 | 1 | 18.72 | 45.34 | 45.22 | 25.81% | 176 |
| Chambal Fertilizers Chemicals Limited | 1,27,564 | 10 | 11.57 | 39.76 | 39.76 | 33.30% | 126 |
| Deepak Fertilizers and Petrochemicals Limited | 58,412 | 10 | 16.91 | 41.47 | 39.2 | 15.04% | 263 |
| Paradeep Phosphates | 51,839.41 | 10 | NA | 3.88 | 3.88 | 12.22% | 31.76 |
| Source: RHP | |||||||
Company’s strengths
- Well-positioned to capture favourable Indian fertiliser industry dynamics supported by conducive government regulations.
- The second largest manufacturer of Phosphatic fertilisers in India.
- Driving raw material efficiency through backward integration of facilities and effective sourcing.
- Secure and certified manufacturing facility and infrastructure and unutilised land available for expansion.
- The strategic location of our manufacturing facility and sizable material storage, handling and port facilities.
- Established brand name backed by an extensive sales and distribution network.
- Strong parentage, experienced management team and prominent shareholders.
Company’s risks
- High dependency on the agriculture sector, hence any changes in the sector may have immediate effect on the business.
- Subject to climatic conditions and is cyclical in nature thus, seasonal variations and unfavourable local and global weather patterns may have an adverse effect.
- Operates in a regulated industry, thus, changes in government policies will have an effect on the operations and profitability.
- The firm has only one manufacturing facility until the completion of the Goa Transaction.
- Historically derived a significant portion of its revenues from operations from a limited number of states.