Heranba IPO is going to launch for subscription on 23, Feb 2021, and will be available for subscription till Thursday, February 25, 2021. The company is looking to raise Rs. 625 crore through public issue in an Offer for Sale of 90,15,000 Equity Shares, the subscription for anchor investors will open on February 22, 2021.
Heranba Industries Limited (HIL) is a Gujarat (Vapi) based crop protection chemical manufacturer, It is one of the leading domestic producers of synthetic pyrethroids like cypermethrin, alphacypermethrin, deltamethrin, permethrin, lambda-cyhalothrin, etc.
Heranba IPO is the 8th IPO getting opened for subscription in 2021 after IRFC IPO, Indigo Paints IPO, HFFC IPO, Stovekraft IPO, Brookfield India IPO, Nureca IPO & Railtel IPO. The equity shares of Heranba are proposed to be listed on both BSE and NSE.
The Heranba IPO issue will be sold in the price band of Rs 626-627 per share and the minimum lot quantity is 23 shares and in multiples thereof.
The latest Grey market premium price (GMP) for Heranba IPO’s were seen up by more than 40% and is currently trading as of today at Rs.250 This means people are expecting it to open on listing day to be at least at Rs.850 or more.
Having said that, I would like to add here that many people underestimated Stovekraft IPO before it’s launch, however the share price made a high of Rs.545 above the pre-open IPO price band of Rs.384.
Likewise for HFFC (Home first finance) IPO, the GMP before launch was at about Rs.650 however the stock got listed at Rs.540 on the other hand for IRFC IPO many people recommended a BUY and GMP were also seen at quite high range but unfortunately it open at a discount price and is currently trading at Rs.25.40.
GMP does not mean in anyway a recommendation for an IPO, the financials of a company and its future prospectus tells a lot. Here is the thing no one can tell you whether the IPO will going to make a stellar debut or not, it is you who have to decide based on available information about the company.
Moreover the IPO’s now a days are very hot market every one wants to earn some quick money on listing day itself and there is nothing wrong about it.
Having said that, one must not forget to check the financials and do not fall for any recommendation from anyone, it is you hard earned money, you should decide whether to opt for the IPO or not.
You may watch various YouTube channels or read on different websites about recommendation for stocks and IPO, it is my humble suggestion and request please do not ever fall prey to it. Better than this is to invest in ETF’s?
Therefore, whenever you are buying IPO make sure the money invested is not the one which you my need it urgently, always use extra money which you may not require in near future, Otherwise stay away completely.
Now, coming back to the Heranba IPO let us talk about in brief about the company and its financials and other details step by step.
About Heranba Industries Limited:
Heranba Industries Limited is a crop protection chemical manufacturer, exporter and marketing company based out of Vapi, Gujarat. The company got established in the year 1992 and started their manufacturing products from 1996 onwards.
The company manufactures Intermediates, Technicals and Formulations. The company is one of the leading domestic producers of synthetic pyrethroids like cypermethrin, alphacypermethrin, deltamethrin, permethrin, lambda cyhalothrin and so on.
Pyrethroids are synthetic chemical compounds that are procured from chrysanthemum cinerariaefolium flowers. Owing to these properties, they are used to control pest insects in farms, homes, communities, restaurants, hospitals and schools etc.
The company’s Pesticides range includes insecticides, herbicides, fungicides and public health products for pest control. The company’s business verticals include:
- Domestic institutional sales of Technicals
- Technicals exports
- Branded formulations
- Formulations exports
- Public health
The company has its in house R&D team for product development and improvisation, which is well supported by its product registration team. The company’s R&D facilities at Unit I and II are recognized by the Department of Scientific and Industrial Research, Ministry of Science & Technology, Government of India (DSIR).
The company’s new R&D facility at Unit III, Sarigam, has become operational in Oct 2020. The company exported its products to more than 60 countries in Latin America, CIS, Middle East, Africa, Asia and South East Asia in FY2020.
As of Nov 15, 2020, its international distribution partners have successfully obtained 371 registrations of its Technicals and Formulations in 41 countries across Middle East, CIS, Asia, South East Asia and Africa. The company has an extensive distribution network in India, supported by a skilled sales force.
The company has more than 9,400 dealers that have access to 21 depots of its company across 16 states and 1 union territory in India supporting the distribution of its products. The company participates in various international and domestic Agrochemical exhibitions and industry conferences to market its products.
Some of its branded formulations sold to farmers in the domestic markets are Jayam, Progress Plus, Param, Cypraplus, Dyken, Mantra, Astron, Signor, Prompt, Cypra, Heraban, Sarag, Alpha Shakti, Henoxa, Glory, Chakde, Heraquat, Zinta, Glory 71, Shera, Pendant, Atria, Macamba, Sulphy, Mask, Silicon Plus, Propizole, Vintage, Exort, Tulip, Mandy, Silicon, Shado, Heraphon, Temper and Rat Kill among others.
India is one of the most dynamic generic pesticide manufacturers in the world and is the fourth largest pesticide
manufacturer after China, the US and Japan.
Let us now move on to know about the financials of Heranba Industries limited (HIL) .
Financials Of Heranba Limited:
Growing at a CAGR of nearly 7.4% during 2014-2019, the India Pyrethroids market is currently experiencing a positive growth. In 2019, the market reached a sales value of US$ 110 Million. Overall, the demand for pyrethroids in India to remain positive during 2020-2025, exhibiting a CAGR of 19.6% and reaching a sales value of US$ 205 Million by 2025.
The agrochemicals market in India reached a value of US$ 2,760 Million in 2019, growing at a CAGR of 6.5% during 2014-2019. In India, the agrochemicals market is rising due to growing demand for food driven by an increasing population.
Heranba earned revenues of Rs 619.21 crore in H1FY21, profit for the year increased by ₹ 223.48 million or 29.64% from ₹ 754.02 million in the Financial Year 2019 to ₹ 977.50 million in the Financial Year 2020.
The profitability margins improved by 2.65% from 7.45% for the Financial Year 2019 to 10.10% for the Financial Year 2020. The total revenue increased by ₹ 2614.28 million or 34.84% from ₹ 7,504.10 million in the Financial Year 2018 to ₹ 10,118.38 million in the Financial Year 2019.
Based on basic EPS for the year ended March 31, 2020, the shares are being issued at 25 times, which is at a discount to the industry average of 61 times.
The PE multiple of the offer is lower than the cheapest listed peer, Bharat Rasayan available at 27 PE. Based on the weighted average EPS, the issue is priced at 30 PE.
Heranba Peers Comparison:
Heranba Industries has priced its issue at 22.1x PE on a trailing basis, which looks quite reasonable to in context to the future prospects of the company. Considering FY 20 adjusted EPS of 24.43 on a post-issue basis, the upper price band implies a P/E ratio of 25.67X.
Seeing the future prospects of the company, sustainable and growing financial statements of the past years, the company’s price band is at a reasonable valuation.
The company’s PAT was Rs 66.31 crore in the corresponding half year. Total revenues reduced marginally by 4% in FY20 to Rs 967.91 crore as against Rs 1011.84 crore in FY19.
Although PAT in FY20 improved to Rs 97.75 crore from Rs 75.40 crore in FY19. The decrease in revenues was majorly driven by a fall in sales in the last quarter of FY20 due to the lockdown because of Corona.
The operating and the net margins show an increasing trend being 15.33%, 13.82% and 12.5% for FY20, FY19 and FY18 respectively. Net margins were 10.10%, 7.45% and 6.25% for the corresponding years. Return on net worth is strong at 30.47% and 33.04% in FY20 and FY19 respectively.
Let us now move on to know about the Heranba IPO Details.
Heranba IPO Details:
Objects of the Issue:
- Funding working capital requirements of the Company (Rs 50 Crore)
- General corporate purposes
Post issue, promoters and promoter group shareholding will come down to 74.15 per cent from 98.85 per cent while public shareholding will go up to 25.85 per cent from 1.15 per cent.
Issue break-up:
• QIB – 50% of the offer: ₹ 312.62 crores
• NIB – 15% of the offer: ₹ 93.79 crores
• RET – 35% of the offer: ₹ 218.83 crores
Frequently Asked Question (FAQ):
1.What Is The Symbol For Heranba Industries Limited (HIL)?
Ans: The Symbol for HIL is HERANBA
2.When Heranba IPO Coming?
Ans: The Issue Period for Heranba IPO is 23-Feb-2021 to 25-Feb-2021.
3. Post Modification Period For Heranba IPO?
Ans: The Post issue Modification Period for IPO is 26-Feb-2021 (10.00 A.M. to 11.00 A.M.).
4. What Is The Cut-off Time Period For UPI Mandate For Heranba IPO?
Ans: The Cut-off time for UPI Mandate Confirmation is 26-Feb-2021 (upto 12:00 PM).
5. What Is The Issue Type For Heranba IPO?
Ans: The Issue Type is 100% Book Building.
6.What Is The Price Band For Heranba IPO?
Ans: The Price (Band) Range for Heranba IPO is Rs.626 to Rs.627 per equity share.
7. What Is The Lot Size For Heranba IPO?
Ans: The Bid Lot i.e. Minimum Order Quantity (lot size) for Heranba IPO is of 23 Equity Shares and in multiples thereof 23 Equity Shares.
8. Who Are The Book Running Lead Managers For Heranba IPO?
Ans: The Book Running Lead Managers are, Emkay Global Financial Services Limited, Batlivala & Karani Securities India Private Limited
9. What Is The Face Value For Heranba IPO?
Ans: The Face Value is of Rs. 10 whereas The Tick Size is of Rs.1
10. What Is The IPO Market Timings For Heranba IPO?
Ans: The IPO Market Timings is 10.00 a.m. to 5.00 p.m.
Apart from above points:
The Maximum Subscription Amount for Retail Investor is Rs. 2,00,000
The Maximum Subscription Amount for Eligible Employee Rs. 5,00,000
The Name of the Registrar is Bigshare Services Private Limited
The Address of the Registrar is 1st floor, Bharat Tin Works Building, Opp. Vasant Oasis,Makwana Road, Marol, Andheri (East),Mumbai- 400 059, Maharashtra, India
The Contact person name number and Email id is : Ashish Bhope, +91 22 6263 8200, ipo@bigshareonline.com
Where To Check Heranba IPO Application And Allotment Status?
As an investor or trader generally we are curious and anxious to know the results of the application as soon as possible. To ease the anxiety, both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) have come up with dedicated pages and links which investors can use.
NSE
The NSE has an IPO bid verification module. It can be used to verify the IPO application details uploaded on the exchange bidding system by your member/bank. The data of the bid details uploaded by the member/bank would be available on T+1 day (where T would be date receipt of bid on NSE platform).
In addition, the data would be available until six days after the issue closure date. This gives the investor enough time to verify the data and instruct the member/bank to make any changes, if required.
Exchange will also provide allotment information as provided by the registrar to the issue.
An investor can avail this facility by registering using his/her PAN details. After registration, the investor will receive an email notification from NSE on the registered email address. That email will provide the login details.
The following link can be used for the same:
https://www.nseindia.com/products/dynaContent/equities/ipos/ipo_login.jsp
BSE
The BSE has also come up with a similar platform.
This unique facility allows investors to verify the status of their application submitted to a Trading Member or a SCSB (Self-Certified Schedule Banks).
The investor can check his application status/information on the website until one week after issue close.
The following link can be used by investors:
https://www.bseindia.com/investors/appli_check.aspx
Important Things To Keep In Mind Before Applying For IPO’s:
- Try to fill for the same IPO online from different DP ID i.e. if in your family have more than 1 account you can possibly get the allocation done in case of over subscription.
- You should have a good knowledge of the sector and the company you are planning to invest.
- Analysis of the company’s balance sheet is very crucial. A clear understanding of the company’s future projects and vision is very necessary to know whether it will have a sustainable future.
- Investment decision has to be taken carefully and not in a hurry.
- Read as much as you can about the company, its objectives for launching the IPO, its past history in business and its futures prospectus.
- Don’t go for hype in the news, your analysis should be based on facts rather than gossips and rumors.
- Many IPOs are oversubscribed. What this means is that the demand for shares is much higher than the shares available for sale. In such a situation, it is no surprise that many investors fail to get any shares allotted to them. This is why it is advisable to apply for IPO shares on the last day of bidding. This way, one can have a good estimate on how large the subscription will be. Also, in that case, one should bid for just one lot and not unnecessarily lock up their capital.
Conclusion:
The Indian agrochemicals market is highly fragmented in nature with many formulators. The competition is fierce with large number of organized sector players and spurious pesticide manufacturers.
In 2019, Heranba Company dominated the India pyrethroids market, accounting for a share of 19.5% of the total Indian Pyrethroids production values.
It was followed by Tagros Chemicals India Limited (14.8%), Hemani Industries Limited (9.9%), Dhanuka Agritech Limited (8.7%), Insecticides (India) Limited (7.9%), Syngenta India Limited (6.2%), Excel Crop Care Limited (5.8%), UPL Limited (4.2%), Bayer CropScience Limited (3.9%), Rallis India Limited (3.6%), Sumitomo Chemical India Limited (3.4%) and others (12.1%).
Let us talk about the strength and weakness of Heranba Industries Limited in brief.
Some of the qualitative factors and strengths of Heranba Limited:
- Presence in a wide range of products across the entire value chain of synthetic pyrethroids.
- Product registrations in the domestic and international markets enabling global outreach.
- Strong product portfolio and wide distribution network
- Diversified and stable customer base
Some of the Risk Factor for Heranba Limited:
- Availability and price of raw materials
- Seasonal and climatic variations
- Ability to obtain registrations
- Growth of new product categories
- Agricultural growth in economy
Apart from above risks, Any restriction or decline in exports to China, the country from which Heranba receive a substantial portion of their overseas revenues, or any other general restriction or curtailment on export of any products they manufacture, could adversely affect the business, financial condition and results of operations.
Therefore, it is always advisable to go through Heranba IPO – RHP to know in detail about the company.
The only thing which should be bothering you is the research you did before applying for the IPO. Investing in IPO is risky as well as profitable. Having said that you also need to keep in mind important things mentioned above before applying to IPO’s as the risk is always involved.
For More Information Do Checkout Basics of IPO and FAQ Here.
Do Checkout 2020 IPO Performance List – Despite Corona Most IPO Listed Gave Positive Returns!!
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Note: Please do your own research and make investment. Moneycontain will not be responsible for any of your losses at all. The point made is for educational purpose only and intended to give information. All investments are subject to risks, which should be considered prior to making any investments. The above details are compiled from information available on public platforms. These are not buy or sell recommendations.
