Strong listing can be seen in Dharmaj Crop Guard's stock

 

• Dharamraj Crop Guard IPO subscribed 35.49 times

Shares of Dharmaj Crop Guard, whose IPO received a good response from investors, may see a strong opening. Shares of Dharmaj Crop Guard likely to get listed tomorrow. The initial public offer (IPO) of Dharmaj Crop Guard was subscribed 35.49 times, with the ₹250-crore issue receiving bids for 28,43,51,820 shares against 80,12,990 shares on offer.

Dharmaj Crop's IPO had a fresh issue of up to ₹216 crore and an offer for sale of 14,83,000 equity shares. Its price range was ₹216-237 per share.

Santosh Meena, Head of Research, Swastika Investmart Ltd, said the gray market premium of the Dharmaraj IPO indicates a listing profit of around 20%.

“The industry outlook is bullish as the pace of growth in pesticide industry production is expected to pick up further, driven by increase in food consumption in the domestic market, increase in population, government support for agriculture, demand from export markets, and horticulture and floriculture agriculture markets, among others," he said.

Speaking on the growth opportunities for the industry, he said: “The penetration of pesticides and agrochemicals in India is low, and this creates a growth opportunity for agrochemical producers. Also, there is a need to reduce dependence on China and improve self-sufficiency. The objective of the government is expected to support backward integration of the industry and thus its growth."

On the issue of Dharmaj Crop, he said it is priced at 20 PE to FY12 earnings, which is lower than most of its listed peers, and the company has posted consistent growth in both revenue and profits. “Profit margins have also continued to grow in a tough environment, and we have seen healthy subscription figures for IPOs, so we are seeing good demand in the gray market. DGCL has been able to develop strong distribution channels and a stable, diversified product portfolio," he added.

According to Abhay Joshi, co-founder of Unlisted Arena, Dharmaj Crop Guard received a good response to its IPO across categories due to reasonable pricing and growth opportunities. “Also, the smaller issue size created huge demand. Given the demand, we can expect a good listing and the issue may get listed at a premium of 15-20% to its issue price.

The category for non-institutional investors was subscribed 52.29 times, the Qualified Institutional Buyers (QIBs) portion was subscribed 48.21 times and the Retail Individual Investors (RIIs) portion was subscribed 21.53 times.