Nova AgriTech IPO booked about 60x on last day; NII portion subscribed 140 times

The initial public offering (IPO) of Nova AgriTech continued to witness a robust response from the investors during the third and final day of the bidding process. Retail and non-institutional investors actively participated in the bidding process, while QIBs was yet to join the party. The issue was subscribed 9.71 times on day one and ended day two with 33.82 times subscription.

Nova AgriTech is selling its shares in the price band of Rs 39-41 apiece with a lot size of 365 shares and its multiples thereafter. The company is looking to raise a total of Rs 143.81 crore via its primary offering, which includes a fresh share sale of Rs 112 crore and an offer-for-sale (OFS) of up to 7,758,620 equity shares.

According to the data, the investors made bids for 1,51,35,49,515 equity shares, or 59.55 times, compared to the 2,54,14,746 equity shares offered for the subscription by 1.10 pm on Thursday, January 25. The three-day bidding for the issue, which opened on January 23, will conclude today.

The allocation for non-institutional investors was subscribed a whopping 141.18 times, while the portion reserved for retail investors saw a subscription of 56.51 times. However, the quota set aside for qualified institutional bidders (QIBs) attracted bids for 2.74 times of their allocation, as of the same time.

Nova AgriTech, incorporated in May 2007, manufactures products that help farmers grow crops better. Hyderabad-based Nova AgriTech mainly focuses on three things- soil health, plant nutrition and crop protection. The products are manufactured using technology and are designed to be environmentally friendly and nutritious.

Nova AgriTech is a one stop solution for soil health management, crop nutrition, bio stimulant, bio pesticides, integrated pest management and crop protection through diversified branded product portfolio. It has a dedicated Research and development facility that supports the technology of new products with an on-site process improvement and incubation center, said Anand Rathi.

"At the upper price band, the company is valuing at P/E of 18.5 times, with a market cap of Rs 379.3 crore post issue of equity shares and return on net worth of 38.27 per cent. We believe that valuations of the company are fairly priced and recommend a 'subscribe for long term' rating to the IPO," it added.

Ahead of its IPO, Nova Agritech raised  up Rs 43.14 crore from four anchor investors after finalising allotment of 1,05,22,220 shares at a Rs 41 apiece. 50 per cent shares have been reserved for qualified institutional bidders (QIBs), while 15 per cent shares shall go to non-institutional investors (NIIs). Remaining 35 per cent of the net offer shall go to retail investors.

Nova AgriTech is promising with its diverse agri-input portfolio, strategic expansion through technical imports, and a focus on innovation and research. The company's international presence and investments in manufacturing capacities signal a forward-looking approach, said Arihant Capital.

"At the upper band of Rs 41, the issue is valued at a P/E of 18.3 times based on H1FY24 EPS of Rs 1.66 (post issue) which is rich valuations compared to listed Peers. Hence, we have a Neutral rating as we remain cautious on the agro chemicals sector which is facing headwinds," it said.

Bajaj Capital and Keynote Financial Services are the book running lead managers of the Nova AgriTech IPO, while Bigshare Services is the registrar for the issue. Shares of the company will be listed on both BSE and NSE with January 31, 2024, Wednesday as the tentative date of listing.

 

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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