Dharmaj Crop Guard IPO Details and Review – Should you Invest?

Ahmedabad based Dharmaj Crop Guard is coming up with an IPO that would open for subscription on 28th November, 2022.  Company is one of the leading agrochemical company in India. Should you invest in Dharmaj Crop Guard IPO? This article would provide IPO details, Dates, GMP, Listing Date and conclusion on whether this is good or bad for investment.

About Dharmaj Crop Guard Limited

Dharmaj Crop Guard Limited is the leading agrochemical company in India. It is engaged in the business of manufacturing, distributing, and marketing a wide range of agrochemical formulations such as insecticides, fungicides, herbicides, plant growth regulators, micro fertilizers and antibiotics to the B2C and B2B customers.

Dharmaj Crop Guard IPO details and Review_

Dharmaj Crop Guard IPO Details

IPO Opening Date 28-Nov-22
IPO Closing Date 30-Nov-22
Issue Type Book Built Issue IPO
Face Value Rs 10 per equity share
IPO Price band Rs 216 to Rs 237 per equity share
Lot Size 60 Shares
Min Order Quantity 60 Shares
Listing at BSE and NSE
Total Issue Size Rs. 251.15 Crores
    Fresh issue     Rs. 216 Crores
    OFS     Rs. 35.15 Crores

Dharmaj Crop Guard IPO RHP

What are the strengths of Dharmaj Crop Guard Limited?

1) Diversified portfolio of our products and consistent focus on quality and innovation

2) Strong R&D capabilities with focus on innovation and sustainability

3) Established distribution network with strong branded products and stable relationship with our institutional customers

4) Experienced Promoters and management team

5) Track record of strong operational and financial performance

What are the Objects of the IPO Offer?

Dharmaj Crop Guard IPO Size is Rs 251.15 Crores which is has OFS and fresh issue

1) OFS for Rs 35.15 Crores – Under OFS, selling shareholders would sell their shares and the company would not get any money from this IPO proceeds.

2) Fresh issue of Rs 216 Crores – Company intends to use the fresh proceeds for the following:

  • Funding capital expenditure towards setting up of a manufacturing facility at Saykha, Bharuch, Gujarat.
  • Funding incremental working capital requirements of the Company.
  • Repayment and/or pre-payment, in full and/or part, of certain borrowings of the Company.
  • General corporate purposes.

Who are the promoters of Dharmaj Crop Guard Limited?

Rameshbhai Ravajibhai Talavia, Jamankumar Hansarajbhai Talavia, Jagdishbhai Ravjibhai Savaliya and Vishal Domadia the promoters of the company.

How is the company financial track record?

Here are the total assets, revenues and profits of the company in the last 3 years and 4 months.

Financial Year ending / Period ending (Amt in Crores)
Particulars FY20 FY21 FY22 31-Jul-22
Total Assets 92.6 128.9 219.5 305.8
Revenues 199.2 303.6 396.3 221.2
Profit After Tax 10.8 21.0 28.7 18.4
Profit % 5.40% 6.90% 7.24% 8.30%

Why to invest in Dharmaj Crop Guard IPO?

Here are the positive factors in this company.

1) Dharmaj Crop Guard Ltd is one of the leading agrochemical company in India.

2) Company has strong revenue growth in the last 3 years.

4) Company margins have improved year on year in the last 3 years.

Risk Factors of investing in Dharmaj Crop Guard IPO

1) Covid pandemic has affected business and is uncertain and can impact the business in future.

2) Company requires certain approvals and licenses in the ordinary course of business, including certain registrations from the Central Insecticides Board and Registration Committee for its agrochemicals.  Any failure to successfully obtain such registrations or maintain its statutory and regulatory permits and approvals can affect business.

3) They are subject to strict technical specifications, quality requirements, regular inspections and audits by its customers and failed to comply with the quality standards and technical specifications can have a negative impact on business.

4) Investors should read complete risk factors indicated in the RHP of the IPO document before investing in this IPO.

What is Dharmaj Crop Guard IPO GMP today?

GMP is nothing but the premium at which the shares are trading in offline market. This is just an indication about the IPO price as it is unorganized market.

  • Dharmaj Crop Guard IPO GMP Chanakya – Nil
  • Dharmaj Crop Guard GMP as per IPOCentral – Nil
  • Dharmaj Crop Guard IPO GMP IPOWatch – Nil
  • Dharmaj Crop Guard IPO GMP IPO Bazar – Nil

IPO of Dharmaj Crop Guard Valuation

Dharmaj Crop Guard IPO price band is Rs 216 to 237 per share.

If we consider FY2022 EPS of Rs 11.62, the P/E ratio works out to be 20x.

If we consider last 3 years weighted EPS of Rs 9.6, the P/E ratio works out to be 25x.

If we annualize 4 months FY23 EPS, the P/E ratio works out to be 11x.

Means company is asking for the issue price in P/E of 11x to 25x. There are listed peers like Astec Life Sciences trading at P/E 55x (Highest) and Heranba Industries trading at P/E 10x (Lowest) and industry average P/E is 24x. Hence Dharmaj Crop Guard IPO share price is reasonably priced.

Dharmaj Crop Guard dates – subscription, Allotment and Listing

Offer Open 28-Nov-22
Offer close 30-Nov-22
Finalization of Allotment 05-Dec-22
Initiation of Refunds 06-Dec-22
Credit to Demat Account 06-Dec-22
IPO Shares Listing Date 08-Dec-22

How to buy Dharmaj Crop Guard IPO online through Zerodha?

If you do not have Zerodha account, sign-up here and proceed to the next step.

If you have a demat account with Zerodha, you can apply this IPO online using the UPI as a payment gateway. Zerodha customers can apply in this IPO by login into Zerodha Console submitting an IPO application form.

Follow below steps to apply this IPO in Zerodha platform:

1) Visit the Zerodha portal and login to the console.

2) Go to Portfolio and click the IPOs link.

3) Visit ‘Dharmaj Crop Guard Limited IPO’ row and click the ‘Bid’ button.

4) Enter your UPI ID, Qty and the Price which you want to bid.

5) Click on ‘Submit’ IPO application form.

6) Visit the UPI App (net banking or BHIM) to approve the mandate.

Dharmaj Crop Guard IPO Review – Should you invest or avoid?

After going through all these points, you might be wondering whether Dharmaj Crop Guard IPO is good or bad for investment?

Dharmaj Crop Guard Limited is one of the leading agrochemical company in India. It has generated strong revenue growth in the last 3 years. Its margins are also improving year on year. Its issue price is also attractively priced.

On the other side, investors should consider the business risk factors indicated above.

Investors can invest in this IPO for a medium to long term.

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Suresh KP

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