Paradeep Phosphates IPO Listing: Paradeep Phosphates shares made their D-street debut today. Paradeep Phosphates got listed at Rs 43.55, a premium of 4 per cent over its issue price of Rs 42 on BSE. On National Stock Exchange (NSE), the counter was listed at a premium of nearly 5 per cent at Rs 44 as against the given issue price. The public offer was subscribed 1.75 times on the last day of subscription. The public issue was subscribed 3.01 times in the qualified institutional buyers (QIB) category, 1.37 times in the retail category, and 0.82 times in the non-institutional investors (NII) category.
The company intends to utilize the net proceeds from the fresh issue to part-finance the acquisition of the manufacturing facility in Goa, repayment/prepayment of part of its borrowings and general corporate purposes. The company will not get any proceeds from the OFS portion, the proceeds of which will entirely go to the promoters.
Incorporated in 1981 and located in Paradeep, Orissa, the company has mopped-up Rs 1,501 crore by a combination of fresh issue of equity shares aggregating up to Rs 1,004 crore and an offer-for-sale (OFS) of 118,507,493 equity shares of Rs 10 each aggregating up to Rs 497.73 crore. The company had fixed a price band of Rs 39-42 per equity share of a face value of Rs 10 each and the shares were allotted to the investors at the upper end of the price band. Paradeep Phosphates is India’s second-largest manufacturer of non-urea fertilisers and di-ammonium phosphates (DAP) in the private sector.
As far as Paradeep Phosphates financials are concerned, it has been making profits in the past and for FY21, the firm reported a revenue of Rs 5164.73 crore as against Rs 4192.87 crore a year ago. Net profit for the period stood at Rs 223.27 crore versus Rs 193.22 crore last year. For the nine months ended December 2021, the company has already surpassed the revenue numbers it achieved in FY21. The company has recorded revenues of Rs 5,959.7 crore during the first nine months of FY22 and the net profit was also higher at Rs 362.78 crore.
What Should Investors Do Post-Listing – Buy, Hold or Sell?
Santosh Meena, Head of Research, Swastika Investmart Ltd., said: “Paradeep Phosphates Ltd has debuted at Rs. 44 i.e. 5 per cent above its issue price. The company’s tepid listing can be attributed to the current market sentiments and a lukewarm response from the investors. The company is one of the largest manufacturers of non-urea-based fertilizers and has competitive advantages in terms of backward integration and location. However, the company is operating in a highly regulated industry, with a very high dependency on the agriculture sector; the business is subject to climatic conditions and is cyclical in nature. Nevertheless, the issue was reasonably priced and interested investors may accumulate the shares post listing for the long term. Those who applied for listing gains can maintain a stop loss of Rs 40.”
Manoj Dalmia, Founder and Director, Proficient equities Private limited, had said: “Considering the initiatives on the agriculture sector by the Government, this company has bright prospects in the future. The issue is too reasonably priced and is worth it if considered for the long term.”