Nova AgriTech IPO Draws Investors Despite Agrochemical Sector Challenges

The initial public offering (IPO) of Nova AgriTech has garnered significant investor interest, despite the challenges faced by the agrochemical sector. The IPO, which opened for public bidding on January 23, 2024, is set to conclude on January 25.

Nova AgriTech, based in Hyderabad, focuses on soil health, plant nutrition, and crop protection. The company aims to raise Rs 143.81 crore through a primary offering, consisting of a fresh share sale worth Rs 112 crore and an offer-for-sale (OFS) of up to 77.58 lakh equity shares by Nutalapati Venkatasubbarao, amounting to Rs 31.81 crore.

The company’s IPO price band has been set at Rs 39-41 per share, with a lot size of 365 equity shares and multiples thereafter. Nova AgriTech has reserved 50% of its net offer for qualified institutional bidders (QIBs), while non-institutional investors (NIIs) are allocated 15% of the shares. The remaining 35% of the shares are earmarked for retail investors.

Nova AgriTech manufactures, distributes, and markets a wide range of agri-input products, including soil health products, crop nutrition products, biostimulants, biopesticides, and integrated pest management products. The company’s subsidiary, Nova Agri Sciences, focuses on the production of crop protection products.

Despite concerns within the agrochemical sector, Nova AgriTech has reported impressive financial performance. For the period ending September 30, 2023, the company recorded a net profit of Rs 10.38 crore and a total revenue of Rs 103.24 crore. In the financial year ending March 31, 2023, Nova AgriTech achieved a profit-after-tax of Rs 20.49 crore and a revenue of Rs 210.93 crore.

Several brokerage firms have shared their opinions on the Nova AgriTech IPO. Arihant Capital Markets maintains a neutral rating, highlighting the company’s diverse agri-input portfolio and strategic expansion. Swastika Investmart suggests subscribing to the IPO, emphasizing Nova AgriTech’s strong presence and consistent growth. Anand Rathi Research recommends a long-term subscription, considering the company’s valuation and return on net worth. StoxBox by BP Equities provides a subscribe rating, emphasizing the company’s asset utilization and expansion. Ventura Securities also suggests subscribing, highlighting Nova AgriTech’s extensive dealer network and farmer outreach programs.

The Nova AgriTech IPO is being managed by Keynote Financial Services and Bajaj Capital, with Bigshare Services acting as the registrar. The company’s shares are set to be listed on both BSE and NSE on January 30, 2024.