Dharmaj Crop Guard IPO Listing: Shares of Dharmaj Crop Guard made their debut on a strong note on Thursday, getting listed at Rs 266 on the BSE, a premium of 12 per cent over the issue price of Rs 237.
Ahmedabad-based Dharmaj’s Rs 251 crore public issue was subscribed 35.5 times during November 28-30, with qualified institutional buyers and high net worth individuals bidding 48 times and 52 times for their respective allotted quotas. Retail investors bid for 21.5 times the shares reserved for them. The price band for the offer was Rs 216-237 per share.
Considering better utilization of IPO proceeds and fair valuation, he expects listing at Rs 280-290 level, which translates to a premium of 18-22 per cent at the upper end of the IPO price band. Major portion of the IPO proceeds will be used for setting up a manufacturing facility in Gujarat and for working capital requirements.
Dharmaj Crop manufactures agrochemical formulations such as insecticides, fungicides, herbicides, plant growth regulators, microfertilizers and antibiotics. It has strong R&D capabilities with a focus on innovation and sustainability.
At the upper end of the price band, the IPO was trading at 27.9 times FY12 earnings and 9.4 times P/BV with a market capitalization of Rs 801 crore.
Dharmaj continues to report healthy growth in earnings in FY22 with profit rising 37 per cent to Rs 28.69 crore and revenue from operations rising 70 per cent to Rs 219.54 crore.
What should investors do?
Santosh Meena, Head of Research, Swastika Investmart Ltd said, “Dharamraj opened with a gain of around 15% in the secondary market, which is in line with market expectations. However, the long-term outlook remains positive, and valuations are still reasonable, so investors can hold the stock while applying for listing profit with a stop loss of Rs. 255.”
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