The Heranba Industries IPO goes to market on February 23, 2021.
Heranba Industries Limited was founded in 1996 based in Gujarat. This company is a manufacturer of crop protection chemicals. They are leading producers of synthetic pyrethroids such as cypermethrin, deltamethrin, lambda-cyhalothrin, etc.
Date: 23 Feb 2021–25 Feb 2021
Price range: 626–627
Minimum order quantity: 23
Heranba Industries GMP (grey market price) : 200–210
Heranba Industries IPO Subscription: Pending Update
They produce advanced agrochemical solutions based on specially developed technology. Our public health products are supplied to both government tenders and pest control companies.
Technical experts Sadashiv K Shetty and Raghuram K Shetty set up a company with the aim of providing innovative products to farmers to maximize farm yield. This was achieved by the research and product development department. best”.
Anish Moonka, head of research at JST Investments, did not give the company a long-term rating because in the past, the company had encountered some corporate governance errors. “However, Heranba Industries’ gray market premium is Rs 100–105 compared to the issue price, so it can be listed for a small premium,” he said.
Heranba Industries, a manufacturer of crop protection chemicals, is set to launch an initial public offering of Rs 625-crore on February 23 at a price range of Rs 626–627. This offer ends on February 25th.
It has a strong network in domestic and foreign markets In India, we have 8600 dealers in 16 states and 1 union territory, and in overseas markets our products are exported to more than 60 countries through international distribution partners.
Heranba is a manufacturer of synthetic Pyrethroids and their intermediates in India. It has an extensive business network not only in India but also in the world market, and it has phenomenal growth every year.
Heranba Industries is a pesticide manufacturer, exporter and marketer based in Vapi in Gujarat and has corporate and management offices in Mumbai.
HERANBA’s mission is to improve crop productivity and public health. It is committed to the health of citizens around the world.
The company has three well-equipped manufacturing units in Vapi, Gujarat, with a total manufacturing capacity of 14,024 MTPA. Additionally, Units I and II, which are recognized by the Ministry of Science and Industry Research (DSIR), have in-house R&D teams, and Unit III’s new R&D facility, Sarigam, is scheduled to be operational from December 2020.
The company’s promoters include Sadashiv K Shetty, Raghuram K Shetty, Babu K Shetty, and Vittala K Bhandary. As of February 10, 2021, the total share amounted to 98.85% of the total share capital.
The company manufactures various types of pesticides, including pesticides, fungicides, herbicides and other pest control products. They have units manufactured in Gujarat’s Vapi with a capacity of 14,024 MTPA. It also has its own R&D department.
Heranba Industries’ IPO (Initial Public Offer) is scheduled to start subscribing on February 23, 2021 next week after Sebi, the capital markets regulator, has received a promise to raise Rs 62.5 billion through public issuance.
It manufactures intermediates, technologies and formulations and is a producer of synthetic pyrethroids such as permethrin, cypermethrin, deltamethrin, alpha cypermethrin, lambdaci halothrin, etc.
CA Maheshwar V Godbole is the Company’s Chief Financial Officer.
Heranba Industries is in a variety of industries, including 1. domestic sales of technology to enterprises 2. technology exports, 3. domestic sales of branded formulations under its own brand name, 4. formulations export, 5. manufacture and sale of insect control chemicals Operates.
Founded in 1992, Heranba Industries Limited is a Gujarat-based manufacturer of crop protection chemicals. One of the leading domestic producers of synthetic pyrethroids such as Cypermethrin, deltamethrin, lambda-cyhalothrin, etc. The company manufactures various types of pesticides, including pesticides, fungicides, herbicides and other pest control products.
The issue consists of a new issuance of Rs 60 crore and an offer to sell a stake of 90.15 lakh by the promoter. Heranba will utilize the net new issuance proceeds for working capital requirements.
We have all of our laboratory equipment such as HPLC, GC, Polarimeters, Particle size Analysers, Spectrophotometers and other conventional laboratory equipment fully equipped in our in-house laboratory.
When will the Heranba Industries IPO open for QIB, NII and retail?
The IPO will open on February 23, 2021 for QIB, NII and retail investors.
How to Apply Heranba Industries IPO?
You can apply for a Heranba Industries IPO through ASBA Online through your bank account. You can apply for an ASBA online through UPI through a stock broker. You can also apply through a stock broker by filling out the offline form.
Sadashiv K Shetty is the company’s Promoter, Chairman and Managing Director. He has over 30 years of experience in the pesticide industry. He was previously associated with Sudarshan Chemical, Gharda Chemical, Hoechst Pharmaceuticals and Nirlon.
The IPO of Heranba Industries, an agrochemical company based in Gujarat, is set to take place on February 23, and the company has fixed a price range of $626–627 per share. This issue is due on February 25th. Heranba is one of the leading manufacturers of synthetic pyrethroids in India. Manufactures intermediates, technologies and formulations and exports to more than 60 countries. The company has three manufacturing plants and more than 9,400 dealers.
The company plans to strengthen its formulation and technology business in the international market.
1) The lot size for the Heranba IPO is fixed at 23. At the top price range of ₹627, 1 lot is £14,421 and individual investors can apply for up to 13 lots.
2) Emkay Global Financial Services Ltd and Batlivala and Karani Securities India are the books running the lead managers for the IPO.
3) According to securities firms, the distribution of shares for Heran Bar IPOs is expected to be confirmed on March 2nd, and listing is expected to take place on March 5th.
4) Bigshare Services Pvt Ltd is the registrar of IPOs and manages share allocations and refunds.
5) According to the IPO guide, in 2019, Heranba Industries Limited dominated the Indian pyrethroid market, accounting for 19.5% of the total Indian pyrethroid production value.
The company plans to enter heavily regulated markets in the United States and Europe.
6) Heran Bar is offering up to 99.8 lakh shares in its IPO, selling 90.2 lakh shares and providing the rest through new shares. Funds raised through the issuance of new shares will be used to fund the company’s working capital requirements and general corporate purposes.
7) In FY20, the company posted sales of €951 crore versus ₹745 crore in FY18 and profits surged from ₹50 crore to ₹97 crore.
8) Today, pyrethroids are used in critical applications across pest protection, environmental health and crop management and animal health.
9) After issuance, the promoter’s stake is expected to drop to 74.2% from 98.8% last month.
10) “At the top of the IPO price range, it comes at 22.67 times TTM EPS revenue, with a market capitalization of Rs. 2509 crore. 30.47%, strong according to the company’s dominant position in the pyrethroid market, strong balance sheet, high RoNW FY20 financial statements, strong Management and rational evaluation. We give this IPO a’subscription’ rating.” The domestic brokerage firm Anand Rathi said in a note.
The company has applied for various technical and official registrations in both Indian and export markets. Many technologies are expected to be patented in the near future. To seize this opportunity, the company has entered regulated markets in the United States (product registration request) and Europe (2 product registrations).
Sujata S Shetty, Vanita R Shetty, and Raunak R Shetty are full-time board members. Kaushik H Gandhi, Mulky V Shetty, Anil Kumar M Marlecha, Ganesh N Vanmali and Nimesh S Singh are Independent Directors of the Board.
What is the Heranba Industries IPO Price Range?
Heranba Industries IPO price band is ₹ 626-₹ 627.
In addition, before placing a product on the market, the company must register with a regulatory body, which is a tedious process and takes about 6 months to 4 years depending on the type of market (regulated and semi-regulated).
Profits from FY19 increased 60.9% to Rs 1,004.4 crore compared to FY18, up 34.8% compared to FY18.
The company is a general pesticide producer with limited research capabilities. We started our R&D facility only in October 2020 to focus on entering regulated markets in Europe and the United States.
Narottam Dharawat of Mumbai-based Dharawat Securities said the chemical sector is popular among investors. The government’s interest in the agricultural sector also adds to the sector’s appeal.
The company has a strong product portfolio and extensive distribution network. The company has experienced promoters and executives.
What is the Heranba Industries IPO Investor Sector?
Investor ratio for QIB-50%, NII-15% and retail 35%.
Raghuram K Shetty is the promoter and managing director of the company. He has over 30 years of experience in the pesticide industry.
The implied P/B (top of the price range) of 5.6 is lower than the average of 7.4.
Heran Bar is the largest company with a market share of 19.5%, followed by others. The divisive nature of India’s agrochemical industry and the presence of numerous organized players and fake pesticide manufacturers have led to fierce competition.
The company plans to strengthen and rationalize its production capacity and operations.
According to the FY20 balance sheet, net working capital was about 18% of total sales, which is consistent with peers.
In FY20, the company’s top 10 customers accounted for about 20% of sales. This means that companies rely on a large number of small customers to sell. Although a B2B merchandising product supplier, selling to many customers indicates that the company does not really have a lot of repeat customer use.
How to apply Heranba Industries IPO through Zerodha?
Log in to the console on the Zerodha website. Go to your portfolio and click on IPO. The IPO name “Heranba Industries” is displayed. Click the Bid button. Enter your UPI ID, quantity and price. Submit an IPO application. Now go to the UPI app in Net Banking or BHIM app to approve the power of attorney.
These companies are susceptible to regulatory scrutiny because their products and facilities can be harmful to nature. In recent years, both facilities have been closed for several days due to violations of certain rules and unfair incidents.
The company sells its products (technologies and formulations) to large B2B players and distributors, then to farmers. In addition, the global pyrethroid market is dominated by large multinational companies, and the companies are small players with a low market share. Together, these factors provide the customer with considerable bargaining power.
What is the Heranba Industries IPO assignment date?
Heranba Industries IPO allocation date is March 2, 2021.
The number of lawsuits against the company is high. This case concerns a variety of issues, including non-compliance with the relevant provisions of the corporate law, alleged violations of environmental laws, violations of pesticide laws, and income tax avoidance. In addition to this, the company has filed 526 check returns lawsuits against several parties.
The pyrethroid industry is seeing demand again in recent years due to the requirement for less harmful but cost-effective alternatives to conventional pesticides. China’s chemical plant closures and a large base of pyrethroid consumers due to environmental issues could increase exports.
What is the Heranba Industries IPO size?
Heranba Industries IPO size is ₹ 625 crore.
Members of the promoters group have been disqualified in the past because they have not filed annual reports for three consecutive years. In addition, management provided guarantees for stakeholder loans, and compliance requirements were also very loose.
The company has obtained product registrations for 371 technologies and formulas in domestic and foreign markets, enabling global promotion.
The company does not have a sustainable competitive advantage such as patents, technical cooperation with global innovators, or global market share for specific compounds. These deficiencies in business quality allow companies to easily duplicate their business by new players.
The company has no patent or research collaborations with global innovators. Also, compared to other domestic pesticide companies, Heranba is a minnow. So you don’t really enjoy economies of scale.
Its business vertical is (a) domestic agency sales of technology; (b) export of technology; © brand formulation; (d) product export; And (e) public health.
What are the Heranba Industries IPO minimum and maximum lot sizes?
The minimum bid is ₹ 14421 for 23 weeks and the maximum bid is ₹ 187473 for 299 weeks.
Due to the important and essential properties of pesticides, these companies tend to be subject to regulatory scrutiny. For example, a recent government commission report recommended stopping the use of certain pesticides banned in the international market. As a result, the company stops selling some products.
Other players in this segment include Tagros Chemicals, Hemani Industries, Dhanuka Agritech, Insecticides (India) Limited, Syngenta India Limited, Sumitomo Chemical India Limited, UPL Limited, Bayer CropScience and Rallis India Limited.
The company has a strong portfolio of registered products in both national and international markets. It has registrations for 18 technologies for manufacture and sale in India, 103 technologies and formulations for manufacture and sale in export markets, and 169 formulations registered for manufacture and sale in India. In addition, the company’s international partners have multiple registrations in more than 40 countries.
Heranba Industries is currently focused on entering regulated markets in the US and Europe. It has registered 2 products in Europe in 2020 and awaits approval in the United States. Generic producers such as Heranba may benefit from this as many technologies release patents in the near future. In order to develop more products, the company recently launched an R&D facility. We plan to use our IPO proceeds to fund our working capital needs and further grow our business.
In the six-month period through September 2020, revenues increased 24.5% to 66.31 crore, while revenues increased 23.3% to Rs 618.34 crore.
In addition, India’s industry is expected to grow at an annual growth rate of 8.5% during 2020–25, and production is expected to reach 25,398 tonnes by 2025.
Heranba Industries, a pesticide company based in Gujarat, could be the answer to the malice of environmental destruction caused by conventional pesticides. Heranba manufactures and markets a variety of pesticides, herbicides, fungicides and public health products based on synthetic pyrethroids.
When is the Heranba Industries IPO listed?
Heranba Industries IPO listing date is March 5, 2021. IPOs are listed on the BSE and NSE.
The company faces several lawsuits. These cases are related to various issues such as non-compliance with the relevant provisions of the corporate law, alleged violation of environmental laws, violation of the pesticide law, and income tax avoidance. In addition, the company filed 526 check return lawsuits against multiple parties.
The company’s products make up about 66–70% of sales, so they rely heavily on raw materials. Heranba mainly supplies raw materials from domestic chemical companies, some of which are mainly imported from China.
The company sells its products to B2B players and various distributors, then sells these products to farmers.
As of September 2020, the amount of contingent debt is Rs. 53.21 crore, which is average at 14% of total net worth.
Heranba has a diverse and stable customer base including e Sumitomo Chemical India, Sulfur Mills, Biostadt India, Crystal Crop Protection, NACL, Sharda Cropchem, Meghmani Organics, PI Industries, Krishi Rasayan Group, Agro Life Science Corporation and Shanghai Agricare Chemical, China. I’m doing it.
The company only has short-term debt, and IPO proceeds are used to meet working capital demand. Also, as of March 2020, one of the facilities is operating at a modest utilization rate of 58.6%. Companies can expand their operations, at least in the medium term, without the need to set up a new plant. This reduces your reliance on external funding needs.
The company has a wide range of products across the entire value chain of synthetic pyrethroids.
In the domestic formulation business (12.7% of FY20 sales), the company has a variety of brands, but due to the merchandising nature of the product, it does not provide any meaningful pricing energies. In addition, in international formulation, the company sells products under the brand name of foreign partners.
Headquartered in Gujarat, Heranba Industries is one of the leading domestic producers of synthetic pyrethroids such as cypermethrin, alpha cypermethrin, deltamethrin, perserine, lambda cyhalothrin, etc. The range of pesticides includes pesticides, herbicides, fungicides and public health products for pest control.
The company sells technology (68% of FY20 sales) and formulations (25%) directly to farmers through B2B players in and outside India and more than 9,400 distributors in India. The company exports its products to more than 60 countries, and China is the largest export market, accounting for 28% of FY20 total exports. Overall, exports accounted for about 50% of FY20 sales.
The company’s products are more environmentally safe and less toxic to the human body compared to conventional alternatives, so they are expected to be increasingly applied to crop production in the coming years.
For the past 12 months (October 2019 to September 2020), the company’s pre-tax income is Rs. 150.1 crore.
The company belongs to the entire product value chain of the agrochemical industry such as intermediates, technologies and formulations, with 18 technologies for manufacturing and sales in India, 103 technologies and formulations for manufacturing and sales in export markets, and 169 registered I have a registration for the formulation. Manufactured and sold in India.
About 50% of Heranbas’ revenue comes from exports. The company exports to more than 60 countries, but does not hedge against currency risk.
The company procured raw materials as needed and did not enter into long-term contracts with suppliers. Since the company’s overall operating size is not large, it is unlikely that the company will enter into a very profitable supply contract.
“A booster for sectoral sentiment will solve the problem,” he said. “The recently registered chemical names such as Chemcon, Neogen, and Rossari have provided investors with great listing benefits.”
During the first half of FY21, the company posted a total revenue of Rs 619.21 crore and generated a net profit of Rs 66.31 crore. The company posted a total revenue of Rs 967.9 crore and a net income of Rs 97.75 in the previous fiscal year.
In addition, proper utilization of facilities, increased use of pyrethroids as an effective alternative to conventional pesticides, integrated operations that exist in both technology and formulations, and adequate debt on the balance sheet will help the company expand its business.
The manufacturing process mainly includes chemical reactions of ammonia decomposition, esterification, hydrolysis, condensation, favorable reaction, isomerization, cyanide, Friedel craft, methoxylation, cyclization and halogenation. We have our own R&D team for product development and improvisation, well supported by our product registration team.
The company is a joint borrower for term loans of Rs 35 crore issued to one of the promoter group companies. The promoters and directors of the company provided personal guarantees to secure this loan. Improper service of this loan may affect the functioning of Heranba Industries.
The global pyrethroid market is worth $3.2 billion. The top 4 players make up most of this category. when
Heranba has three manufacturing and packaging facilities around the industrial belt in Vapi, Gujarat, with 174 reactors with a total manufacturing capacity of 14,024 MTPA.
In the past, several members of the promoter group have been warned by SEBI about executing certain trades on the stock market. Members of the promoters group were disqualified from the company’s directorship as they did not submit annual revenue and financial statements. However, their boarding positions were restored by filing all pending annual reports and financial statements.
Heranba has an integrated set of operations that exist across pesticide intermediaries, technologies and formulations at Vapi’s industrial belt in Gujarat and three manufacturing facilities around it. Integrated operations allow companies to reduce their reliance on third-party vendors and improve their bottom line as the industry grows.
Another brokerage, Geojit, has a subscription level. “At the top price point, Heranba Industries at Rs.627 is reasonable compared to its competitors at a P/E of 18.9 times (based on FY21E EPS of Rs.33.2 per year). Taking into account a strong distribution network, sound margins and profitability to increase export opportunities, You need to solve the problem in the long run.
The company plans to develop new products in the R&D facility of Unit III (Sarigam Unit).
Pyrethroids are compounds used to control pests and insects on farms, homes, and offices. It identifies the composition of mosquito repellent and is certainly a derivative of pyrethroid. Unlike the widely used organophosphate pesticides, pyrethroid based pesticides cause less harm to the environment and less toxicity to humans.
The company has exported its products to FY20 to more than 60 countries in Latin America, CIS, Middle East, Africa, Asia and Southeast Asia.
The chairman and managing director have over 50 years of integrated leadership in the company. The founding promoter will continue to hold about 75% of the company on a post-issue basis.
In three manufacturing plants with a total production capacity of 14,024 Mtpa, Heranba consolidated the intermediaries, technology and operations that exist in the formula. Technology is a concentrated solution mixed with other ingredients to make the final product, the formula.
The sales network is supported by more than 9,400 dealers/distributors in 16 states.
Heranba Industries plans to focus on manufacturing and selling formulations and manufacturing and marketing public health products in India under its own brand.
While regulatory changes can affect certain pesticide compounds, overall this industry is relatively unaffected by disruptive changes. The combination of these elements makes it easy to withstand the company’s products being outdated or replaced.
Heranba Industries reported a 29.6% increase in revenues of 97.75 crore in the fiscal year ended in FY20 compared to FY19 due to low tax costs and high other income. However, operating revenue fell 5.3% compared to FY19 at Rs 951.37 crore.
There is a worldly demand for pesticides for use in crop production. In addition, the consumption of pesticides per capita in India is lower at 0.6Kg/Ha compared to developed countries.
The company had an operating return of 8% based on operating revenue in September 2020.
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