Sharda Cropchem IPO – Should you invest?

131 comments

Sharda Cropchem IPOSharda Cropchem IPO – Should you invest?

Snowman Logistics IPO got oversubscribed 60 times and its buzz has not yet completed. Another strong IPO is going to hit the market this week. Sharda Cropchem Limited is coming up with an IPO of 2.25 Crore shares. Sharda Cropchem IPO would open for subscription on 5th September, 2014. Sharda Cropchem Limited is earning good profits compared to its peers. It is consistently growing in terms of revenues and profits. Should you invest in a Sharda Cropchem IPO? What are the risks you should consider if you want to invest in a Sharda Cropchem IPO?

About Sharda Cropchem Limited

Sharda Cropchem is a crop protection, chemical company engaged in the marketing and distribution of a wide range of formulations and generic active ingredients globally. They are also involved in order based procurement and supply of Belts, general chemicals, dyes and dye intermediates. Over the years, it has, primarily, grown organically and core strength lies in identifying generic molecules, preparing dossiers, seeking registrations, marketing and distributing formulations or generic active ingredients in fungicide, herbicide and insecticide segments. They have also recently entered into the biocide segment and have acquired several registrations from the existing registration holders, primarily, in Europe. As of February 7, 2014, they have over 170 Good Laboratory Practices (“GLP”) certified dossiers and as of November 30, 2013, own over 980 registrations for formulations and over 140 registrations for generic active ingredients across Europe, NAFTA, Latin America and Rest of the World.

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Issue details of Sharda Cropchem IPO

  • IPO opens: 5-Sep-2014
  • IPO closes: 9-Sep-2014
  • Face value: Rs 10 per share
  • Issue method: 100% book building issue IPO
  • Issue price range: Rs 145 to Rs 156 (cutoff price is Rs 156)
  • Minimum subscription: 90 shares and multiples of 90 shares
  • No. of shares open for subscription: 2.25 Crores out of which 35% is Retail portion.
  • Issue size: Rs 327 Crores to Rs 351.86 Crores
  • Lead Managers: Edelweiss Financial Services Limited and IDFC Capital Limited
  • Listing: BSE / NSE
  • Download Sharda Cropchem IPO Prospectus from SEBI Website

Purpose of the IPO:

The funds would be used for the following purposes.

  • The objects of the Offer are to achieve the benefits of listing the Equity Shares on the BSE and the NSE.
  • To carry out the sale of 2.25 Equity Shares by the Selling Shareholders.
  • The listing of the Equity Shares will also provide a public market for the Equity Shares in India.
  • The listing of the Equity Shares will enhance our brand name and provide liquidity to the existing shareholders.

Company Financials

  • Company generated revenue of Rs 351 Crores for the year ended Mar-10 and Rs 782 Crores for the year ended Mar-14.
  • Company posted a profit of Rs 28.6 Crores for the year ended Mar-10 and a profit of Rs 106.9 Crores for the year ended Mar-2014.

Sharda Cropchem Limited IPO-Financials

Reasons to invest Sharda Cropchem IPO

  • Strong revenue growth in last 5 years.
  • Profits are consistently increasing and stands at 13.7% for FY 2014. Its competitors like Rallis India profits are at 8.66% and PI Industries is at 11.67% during this year.
  • Good future prospects seen in this business.

Reasons not to invest in Sharda Cropchem IPO

  • Crisil ranks this IPO as 3/5 indicating average fundamentals.
  • Outstanding criminal proceedings against promoter and independent director of the company.
  • Outstanding legal proceedings involving promoter, subsidiaries and Director. Any negative outcome, can impact the company performance.
  • Agri chemical business is highly regulated sector and failure to comply affects the business.
  • Offers products to protect various crops in agriculture industry. Business is seasonal and cyclical in nature. Climatic conditions would adversely impact business.
  • Business can affect by the introduction of alternative crop protection measures such as biotech products, pest resistant seeds etc.

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Recommendation / Investment strategy

  • Its EPS for the year ending Mar-2013 is Rs 9.31. Its EPS for year ended Mar-14 is 11.85. Considering the cutoff price of Rs 145, the P/E Ratio based on FY 2013 EPS is 16 and FY 2014 is 13. Means its issue price P/E ratio works out in between 13 to 16.
  • Its competitors like Rallis India P/E Ratio is 29 (highest) and lowest is 6. The industry average P/E Ratio is 22.8. Hence the maximum share price /cutoff price of Rs 145 for Sharda Cropchem IPO reasonably good.
  • Sharda Cropchem Limited IPO has some positive factors. Its revenues are consistently growing. Profits are good and high compared to its peers. The issue price is also reasonably priced. Considering all these strong points and keeping negative points in mind, investors can invest in this Sharda CropChem Limited IPO. I am personally planning to subscribe to this IPO.

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Suresh
Sharda Cropchem Limited IPO

Suresh KP
Latest posts by Suresh KP (see all)

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131 comments

  1. Hi sir,
    In last month the share price has increased a lot. And the nine moth results is promising. Sales has increased in last year. Keeping this in mind what can i do?

    Reply

  4. Dear Mr.Suresh
    Q2 result showing margin reduced due to corrency transaction losses so we can hold for long term? Share your view on this result

    Reply

  5. Sir,
    1 lot was allotted to me. I am presently holding it. AS the price is decreasing i am wondering whether to hold it or sell it. What are your views about it??

    Reply

  6. hi suresh,

    i bought 100 shares of Sharda today @260 and then the prices came down drastically.
    is there any chance of this rising above 300 in the coming days?

    thanks

    Reply

      1. hi

        is this going to reach around 350 in the near future to book some profits as i bought it @260. i am expecting bull run for this script.
        thoughts?

        thanks

        Reply

  7. Hi Suresh,

    Need your Suggestion.
    I have been allocated 90 shares and the share are already showing 60% growth in first 2 hours of listing
    Is it advisable to sell now or should I hold them further. If hold, then how much holding period would you recommend.

    Best Regards

    A. K. Arora

    Reply

      2. Today most of the people are just selling. The price is fallen from 260 to 225. Shall we still buy it or not? Are you buying it?

        Reply

  9. hi suresh,

    i placed the bid for sharda within the first 5 minutes of the subscription period. still i didn’t receive even 1 lot.
    Don’t know how exactly the allocation process is done.
    Any thoughts?

    thanks

    Reply

  10. But My broker Itself has given me the Manual Application, i have the scanned copy of application with me and also with check.
    I had dropped the mail.Waiting for reply from the Karvy guys.

    Thanks
    Saurabh joshi

    Reply

        1. thanks for the Advise sir, I had dropped the Mail. and Got Revert from Karvy.
          A cheque is sent through Registered post on my Address. Thanks a ton for the Great guidance. Will Pray to god that I get an allotment in Monte carlo once its open for the Bidding.

          Looking for your article on Monte Carlo as well, its still awaited but seems good to have prior knowledge.

          Thanks
          Saurabh Joshi

          Reply

    2. Sri…

      For how many share you applied? and through which demat services ?Please let us know your procedures, so will correct our way if anything wrong we are doing.

      Reply

      1. I applied for 3 lots. It is purely luck based, as it is lottery system. Some will get some won’t. It doesn’t matter whether it is 1 lot or maximum lots. I feel that we need to apply for only 1 lot if it is going to over subscribe.

        Reply

      2. One best option would be, creating more demat/trading accounts (in our family members names, etc.) and apply for a min. lot. So, your possibility to get allotted will increase.

        Reply

          1. We need to have trading account and demat a/c to subscribe an IPO correct? or demat a/c is enough. I am looking for cost effective solution. If you find one let me know.

    1. Congrats. When is the party ? Listing date is in next 2-3 days. You should get good listing gains of 30% to 50% on first day. But hold this for atleast 1 week to see good returns.

      Reply

  21. Hi Suresh,

    I had applied to sharda cropchecm IPO through icicidirect. I chekced teh status yesterday. It shows the status as EXEcuted howvere when I check share allotmnet I donot see anyshares alloted also ASBA is not release nor amount has been debited from my account. what should I infer from this? that allotemnt is still about to happen or I will not be getting any shares of sharda?

    rgds,
    Suraj

    Reply

  22. sir,first visited your blog & find very useful.what is the listing date of sharda cropchem ipo? please also share some small-cap investment ideas as retail investors dont know about it..thanks

    Reply

  24. I am regular follower of your blog. Really thanks for your valuable suggestions. I have subscribed 5 lots on the opening day.
    But today I come across this link, is this really giving correct figures, can you please shortly comment on this?

    Regards,
    Prasad

    Reply

  25. Sir,

    I want to know about UTI-transportation and logistics Growth fund and SBI pharma because I have plan to invest in these two product. I am reaching here after research on the net but i can’t go with internet research please suggest me that are these good product to invest and if yes than tell me about these in brief. if these are not good than should i invest in UTI midcap/Reliance small cap/Birla sun life/HDFC mid cap. I need your help.

    Reply

  26. hi suresh,

    ui use icicidirect and have follwoing questions:

    1. if I apply for ipo through ASBA, on first day after market hours will this order be executed next day when market opens .

    2. if i apply on friday after market hours will it get executed on monday morning?

    3.can i apply for ipo one day before ipo opens . i mean just place an order one day before it opens for subscitptionm?

    same questions i have about buying equity.

    regrd

    arjun

    Reply

    1. IPO, order is executed within few hours of you applying it. Since these are not listed in stock exchange, it is nothing to do with market timings. However there is cut-off time which they follow. You cannot apply in advance. You can subscribe only during subscription period. However when you buy equity all would be executed during Monday to Friday during market timings only.

      Reply

  27. Hi Suresh,

      Are you investing in this stock? Didnt find that comment. I found that for Snowman Logistics.

    Thanks

    Milind

    Reply

      1. hi Suresh,

        I had also applied, whats the process for allotment. its on Lottery basis or first come first basis.

        I had applied through the Application Process, filled the hardcopy of sharda form and given the Cheque for same yesterday. 

        Thanks

        Saurabh Joshi

        Reply

          1. Hi suresh,
            I had checked today With Karvey Call Centre, I am not alloted any singlr lot, as my application got rejected due to Technical Reasons.
            The Karvy agent on call told me that my Demat Account is not Valid and Address was not there, I had compained the Same to my Brokerage company ,but the Broker said there is no such Thing. He had Cross checked all details.
            Now I am stucked between Karvy and Brokerage comapny, as in near future if I’ll apply for IPO , i am scared again same thing not happens.
            So Please Guide me what I can Do in this situation. I had dropped an mail to Karvy.
            Is there any other thing which can Speed out the Process.

            Thanks
            Saurabh Joshi

          2. Have you given manual application ? You should sort this with Karvy quickly. Also next time, do only online or call stock broker where you have demat account. Don’t get into this manual application process

  28. Dear Mr.Suresh
    Thanks for recommendation on wonderla and snowman also kindly tell me the exit price on this shares
    Also tell me the reason for sarda cropchem ipo for listing gains or long-term gain

    Reply

    1. Raj, You can exit if you get 30% to 50% returns. Sarda Crop chem, you can wait for 1-2 years and book profits. If you are getting 30% returns within 1 year, you can sell them

      Reply

  29. Hi Suresh,

    I have a doubt regarding the issue price range. For the Sharda Cropchem IPO, the issue price range is 145-156. Is it only those requesting at a higher price range will get the shares allotted in case of over subscription? How does this price range work?

    Reply

  30. hi suresh,

    thanks for your recommedations. i am a small investor and can apply only for 1 lot. i applied through icicidirect for snowman only 1 lot at cutoff price. I followed the ASBA route.is there any prefernce given fr ppl who dono t follwo teh ASBA route for ipo allotment?

    also when would I come o know if snowman shares are alooted to me?

     

    regrds

    arjun

    Reply

  32. Hello suresh, 

    I had gone through your Previous blogs also in respect of IPO. you had mentioned in some  comments that Log

    in to Demat Account and Go to IPO section, but I had contacted my brokerage agency , they had told me that a Person should have to fill the Hard copy for Applying in to IPO's. I can't fulfill the requirements through Online Mechanism.

    Is it right or one can do all the Process Online.

    Reply

    1. Many brokers offer online process. It is easy and convenient. If some brokers are saying do paper work even now, looks strange. You should open account with major brokers then

      Reply

      1. hi suresh, 

        My Demat account is with  Bonanza, i am sure you must have heard the name. I had asked them several times for the Online IPO Process, but they told me that you need to bring the Cheque and PAN card Copy for Applying into IPO . If there is any other Broker who Provides the same Facility with Online Services. Please Suggest, although today i am Visiting there Office to Fill those Hardcopies and to Apply for this IPO.

        Reply

  33. Dear suresh. thank you for your advise, I have a demat account in ABM, and also a Bonanza portfolio ltd. So i am lanning to invest in this IPO. last ipo snowman i missed because of not having a demat account. So kindly suggest me if i invested in this IPO, what is the minimum amount to subscribe? if i invest more money in this is there any risk? pls suggest me.

    Thank u in advance, awaiting for your reply.

    regards

    Srinivas

    Reply

    1. Mimumum subscription is 90 shares. Subscribe at cut-off price of Rs 156 per share. There is no risk if you invest in multiples of 90 shares. However there are high changes that you would get alloted minimum of atleast 90 shares

      Reply

  34. Hi Suresh,

    I am first time visitor your blog and found your articles are thoroughly analysed and providing good suggestion with valid reasons.

    I am willing to apply for this IPO, meanwhile I need one clarificattions, recent Snowman IPO Logistics I have made subsription of 3000 shares almost 1.4 Lakhs. It is damn sure I will not get all shares qty. 

    I understand Snowman IPO refund would be on 08th September. This Sharada IPO Subscription last date is 9th September.

    Snowman IPO is my first subsciption, I do not have earlier experience. from your experience. could you share the Snowman refund date, accordingly I shall plan my fund plan to subscripe this IPO.

     

     

     

     

     

    Reply

    1. Prabhu, Why do you think that you may not get alloted 1) Earlier for Wonderla which got subscribed for 38 times, I applied for 1000 shares, but I got only 100 shares. But I got profit of 150% till now. I am happy. 2) We cannot say 8th Sept for snowman refund. If comes, ok, but do not regret if it does not come.

      Reply

  35. Sir I had gone through complete Article and I beleive that one Can not Apply for IPO with amt less than  > 5000.I beleive my observation is correct. although I had gone through your comment of First day and First Hour. Still i beleive one has to follow the minimum lot Conditions. 

    Please comment on same as I am a first Timer in this market.

    Reply

    1. I could not understand Rs 5,000 ? Sharda cropchem ipo minimum subscription is 90 shares. Means if you are buying at cut-off price of Rs 156, you need to subscribe for minimum of Rs 14,040.

      Reply

      1. Yes Suresh , as I told I am first timer, Now I undersatnd that I have to bid at upper range(i.e. 156*90) Do you think applying for single lot (90 shares) will workout.

        As I have Limited funds With me as of now. 

        Looking forward for your reply.

        Reply

          1. So Can you tell me any Approximate Idea for how much lot should I bid, to get atleast one lot of them

            And also , 156 is the upper range, so to get the Lot in my bucket , I have to bid on the cut off Price only.

  36. which demant account should i open which will be good in long run as i am new and i have not invested in share earlier. 

    Reply

  38. their one investor is geeting out from thsi company with the help of this IPO. So it is worth to invest in this?

    Reply

    1. Vikas, Don’t worry about it. These are common that during IPO issue (sell stake + market their share value) or when someone want to sell their stake, companies do such things

      Reply

      1. Dear Suresh,

        Thanks for reply. But after going with different articles i think company bringing this IPO just for the name shake and to get out their investor from it. They should have plan in place. As the investor who is exiting from the company will earn around 3-4 times amount. According to me this IPO will be fail.

        I will be more happy if i am wrong and learn from it.

        hope for the best.

         

        Reply

    1. I feel it could be both. When myinvestmentideas.com who recommended first in India for Wonderla, I said one can expect good returns during listing + long term. Now it is 150% in just few months. So you can sell as you got the returns you were expecting even after holding for some time. 

      Reply

      1. Thanks Suresh… I still regret not buying wonderla ipo then…Just hoping to get shares in snowman and now sharda cropchem…

        Reply

  40. Hi Suresh,

    Thank you for posting again such a wonderful article. Do you recommend to subscribe this IPO in small amounts or big chunks? The same way please let us know about minimum investement when the full prospectus is available. 

    Once again Thank you very much… And one last wish if you can do it.. Why don't you arrange a money management session in person when you get time? Please think of it.

    Regards

    Kishore

    Reply

    1. Kishore, I could not see the final prospectus, hence could not incorporate in article. I am thinking 100 shares are minimum. I would consider your request of conducting money management session. However I would charge fees for that 🙂

      Reply

  42. As the IPO’s are getting oversubscribed, is it worth applying more than the minimum lot? I am running short of money and wondering whether it is worth subscribing more than the minimum lot or not ….

    Reply

    1. Sri, I have seen couple of observations 1) Invest on first day, first hour 2) Invest in for atleast 2-5 times of minimum lot. This way I felt, there are maximum chances of getting allotment. I personally experienced, hence this comment. There could be several other ways which I need to analyse

      Reply

      1. Thanks. with regards to your comment

        Invest in for atleast 2-5 times of minimum lot.

        Are we not restricted to apply only once per PAN?

        Reply

        1. What I meant is invest 2-5 times of minimum lot. e.g. Sharda Cropcom IPO minimum subscriptions of 90 shares. You can apply for 180 to 450 shares so that atleast you get 90 shares

          Reply

      2. ~~DECODING THE NEW ALLOTMENT SYSTEM
        Changes  •One lot to be worth between Rs 10-15k, up from earlier Rs 5-7k
        •Minimum allotment of one lot to all retail applicants, wherever possible
        •Balance shares to be allotted on proportionate basis
        •In case of huge oversubscription, lottery system to be followed

        Impact
        •Most investors likely to bid for single lot
        •Will encourage multiple applications
        •IPO funding will take a beating
        •Bulk of applications will come few hours before closing
         

        Reply

  43. Dear Mr.Suresh – Thank you verymuch indeed for this information.  Kindly advise if we should bid this on cut off price or lesser.

    rgds

     

    Reply

  44. This script looks good remind of rpower(hope no rpower here) and jubilant food. Rpower made waves but jubilant was the winner.considering retailer have already applied by multiple application to same snowman,I am banking on liquidity issue also and more chances to get some shares here. Your comments

    Reply

  46. Hi Suresh,

    Thank you for your quick response. I have one quick question. What is the actual cut off price, whether it is 145 or 156? Could you please advise, on which amount we need to subscribe to this IPO?

    Reply

  47. Hi Suresh,

    Is there a reason why Henderson Equity Partners are exiting their 15% stake in the company? This is a huge chunk of the 25% on secondary sale.

    Regards,

    Darshan

     

     

     

    Reply

  48. Hi Suresh,

    I am following most of your recommendations and was being successful for the past 1 year. I thank you personally.

    I have a doubt on this subscription. What is the minimal lot count for this IPO, because i am a minimum investor on Shares in general. Would you be also investing in this IPO?

     

    Regards,

    Vignesh. S

    Reply

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