Indogulf Cropsciences IPO opens today: Should you subscribe to it?

The initial public offering (IPO) of Indogulf Cropsciences kicks off-for bidding today, that is on Friday, June 25. The agrochemical player is offering its shares in the range of Rs 105-111 apiece. Bids can be made for a minimum of 135 equity shares and multiples thereafter. The issue can be subscribed until Monday, June 30.

Incorporated in 1993, New Delhi-based Indogulf Cropsciences is engaged in manufacturing crop protection products, plant nutrients, and biologicals in India. It manufactures Spiromesifen technical with 96.5 per cent purity in 2019 and is one of the first indigenous manufacturers of Pyrazosulfuron Ethyl technical with 97 per cent purity in India.

Indogulf Cropsciences is looking to raise Rs 200 crore via IPO, which includes a fresh share sale of Rs 160 crore and an offer-for-sale (OFS) of up to Rs 40 crore by its promoters. Net proceeds from the fresh issue shall be utilized towards funding working capital requirements, repayment/prepayment of debt, capex towards setting a new plant in Sonipat & general corporate purposes.

Indogulf Cropsciences raised Rs 58.20 crore from five anchor investors as it allocated 52,43,242 equity shares at Rs 111 apiece. Its anchor book includes names like Abakkus Diversified Alpha Fund, Viney Growth Fund, Sunrise Investment Trust-Sunrise Investment Opportunities Fund and Rajasthan Global Securities.

Indogulf Cropsciences has reserved 50 per cent of the offer for qualified institutional bidders (QIBs), while non-institutional investors (NIIs) will have 15 per cent of net offer reserved for them. Retail investors will have 35 per cent of shares allocated for them. Last heard, It was commanding a grey market premium (GMP) of Rs 11 apiece, suggesting 10 per cent listing pop.

For the nine months ended on December 31, 2024, Indogulf Cropsciences reported a net profit of Rs 21.68 crore with a revenue of Rs 466.31 crore. The company reported a net profit of Rs 28.23 crore with a revenue of Rs 555.79 crore for the financial year 2023-24. The company shall command a market capitalization of 701.54 crore.

Systematix Corporate Services is the book-running lead manager of the Indogulf Cropsciences IPO, while Bigshare Services is the registrar for the issue. Allotment shall be finalized by Tuesday, July 1 and shares of the company shall be listed on both NSE and BSE with Thursday, July 3 as the tentative date of listing. Here’s what brokerage firms say about the IPO of Indogulf Cropsciences:
 

Anand Rathi Research
Rating: Subscribe
Indogulf manufactures both technical and formulation products. It has positioned itself as indigenous manufacturers of Pyrazosulfuron Ethyl technical, with 97 per cent purity in India. Its strong market position is further supported by the high entry barriers in the agrochemical sector including costs and complex approvals, said Anand Rathi Research.

“The issue is fairly priced. The company has posted stable top and bottom lines despite raw material price volatility in past years. We believe that it is well placed to achieve growth in the long run with its backward integrated manufacturing facilities, focused R&D capabilities, strong distribution and sales network and diversified product portfolio,” it said with a ‘subscribe’ rating.
 

SBI Securities
Rating: Neutral
Indogulf is valued at 9MFY25 annualized P/E and EV/Ebitdamultiples of 25.9 times and 12.8 times, respectively. The revenue, Ebitda and adjusted PAT has grown at a CAGR of 6.5 per cent, 12.2 per cent and 10.2 per cent to Rs 552 crore, Rs 59 crore and Rs 32 crore, respectively during FY22-FY24, said SBI Securities.

“While comparing the IPO with its closely listed peers, the issue appears to be fairly priced across different valuation and financial parameters. We maintain a ‘neutral’ view on the issue and would prefer to review the company’s financial and operating performance post listing,” it said.
 

SMIFS
Rating: Subscribe
Indogulf is expected to benefit from volume growth as well as premiumization across its product categories. The commissioning of the Rs 140 crore dry flowable (DF) plant at Barwasni is set to enhance in-house manufacturing capabilities, expand margin-accretive formulations, and reduce reliance on external suppliers contributing to both revenue acceleration and cost savings, said SMIFS.
 

“We recommend subscribe to the issue due to continued product launches, increasing focus on higher-margin biologicals and plant nutrients, and expansion into international markets such as the USA, Turkey, and South Korea are expected to drive revenue and margin growth,” it added.
 

Arihant Capital Markets
Rating: Neutral
Indogulf Cropsciences has established a presence across crop protection, plant nutrition and biological segments, with a growing product portfolio and backward-integrated operations. Its focus on R&D, supported by a NABL-accredited lab and patent filings may aid future product development, said Arihant Capital.
 

“While the company stands to benefit from long-term growth in the agrochemical sector, near-term performance will depend on execution of expansion plans and efficient utilization of IPO proceeds. The issue is valued at a P/E ratio of 24.27 times, based on PAT of annualized 9MFY25 EPS of Rs 4.6. We are recommending a ‘neutral’ rating for this issue,” it added.
 

Ventura Securities
Rating: Subscribe
Indogulf’s growth prospects are promising, driven by its diversified product portfolio, strong distribution network, and focus on sustainable agricultural solutions. With 138 products in the registration pipeline, ongoing investment in innovation, and an experienced leadership team, the company is well-positioned to capitalize on the expanding agrochemical industry, said Ventura.

“Indogulf is set for continued growth in domestic and global markets, leveraging its expertise and competitive advantages to meet the rising demand for crop protection products and ecofriendly solutions. Its focus on backward integration and R&D has improved product efficiency, cost control and operational margins, helping it maintain strong profitability,” it said with a ‘subscribe’ rating.