IPO Update: Dharmaj Crop Guard Files Draft Papers with SEBI to Raise 300 Crore

Dharmaj Crop Guard, an agrochemicals company, has filed preliminary paperwork with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO). The public offering consists of a Rs 216 crore fresh issue of equity shares and a 14.83 lakh equity share offer-for-sale (OFS) by promoters. Employees will be able to purchase shares as part of the deal.

Insecticides, fungicides, herbicides, plant growth regulators, micro fertilisers, and antibiotics are among the agrochemical formulations that the company manufactures, distributes, and markets to both B2C and B2B customers.

Rameshbhai Ravajibhai Talavia, the company’s Chairman and Managing Director, has over 28 years of expertise in the agrochemical sector. Atul Limited, Heranba Industries Limited, Innovative Agritech Private Limited, Meghmani Industries Limited, Bharat Rasayan Limited, Oasis Limited, United Insecticides Private Limited, and Sadik Agrochemicals Co. Ltd. are some of the company’s important customers.

The Central Insecticide Board and Registration Committee (CIB&RC) has granted it 398 agrochemical registrations, of which 201 agrochemical formulations and 6 agrochemicals technical are for sale in India as well as for export, and 191 agrochemical formulations are solely for export.

According to the company’s DRHP, it has also applied for registrations with the CIB&RC for 6 agrochemical formulations and 17 agrochemical technicals, which are currently pending at various stages.

It sold 109 branded formulations to farmers and 196 bulk products to more than 600 institutional customers in the local and foreign markets as of November 30, 2021. It has around 150 trademark registrations, which include its own branded products that are offered to customers.

The Gujarat-based agrochemical firm’s profit grew to Rs 20.96 crore in FY21 from Rs 10.76 crore in FY20, while revenue increased to Rs 302.41 crore from Rs 198.22 crore during the same year. For the seven months ending October 31, 2021, it had a profit of Rs 18.66 crore on revenue of Rs 227.26 crore.

Manjulaben Rameshbhai Talavia, Muktaben Jamankumar Talavia, Domadia Artiben, and Ilaben Jagdishbhai Savaliya, the company’s promoters, will sell shares through the OFS.

The proceeds of the offering will be utilised to cover capital expenditures for the construction of a manufacturing plant in Saykha Bharuch, Gujarat, as well as funding incremental working capital needs, debt repayment, and general corporate reasons.

More than 20 nations in Latin America, East Africa, the Middle East, and Far East Asia have the supplies of the company’s products. The offering’s primary bookers are Elara Capital (India) Private Limited and Monarch Networth Capital Limited.

In the worldwide agrochemicals market, India is the fourth largest producer, trailing only the United States, Japan, and China. It is a net exporter of agrochemicals and is now the world’s 13th largest pesticide exporter. The total Indian pesticides and other agrochemicals sector is predicted to develop at a CAGR of 5.2 percent -5.7 percent by 2023-24, owing to expected expansion in the foreign market and a likely increase in domestic pesticide usage in India.

Surat-based Aether Industries, a specialty chemical manufacturer that also serves the pharmaceutical, agrochemical, material science, electronic chemical, high-performance photography, and oil and gas industries, recently filed a draught red herring prospectus (DRHP) with market regulator Sebi for a public offering of up to Rs 1000 crore.