Dharmaj Crop Guard IPO subscribed 1.79 times on day 1

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Dharmaj Crop Guard IPO subscribed 1.79 times on day 1
  • The agrochemical company has been subscribed 1.79 times on the first day of the subscription process.
  • The company plans to raise ₹251 crore via fresh issue of shares, and an offer for sale from existing shareholders.
  • The IPO price band is set between ₹216-237 a share.
  • The grey market premium (GMP) of the company’s shares is at ₹55 per share.
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The initial public offering (IPO) of Ahmedabad-based agrochemical company Dharmaj Crop Guard has been subscribed by 1.79 times on the first of the subscription process.

The IPO price band is set between ₹216-237 a share. The offer opened on November 28 and will close on November 30.

Dharmaj Crop Guard’s IPO received good demand from retail investors as this portion was subscribed by 2.6 times.

The company plans to raise ₹251 crore via a fresh issue of shares worth ₹216 crore; and an offer for sale from existing shareholders worth ₹35 crore.
Category of investors Subscription status
Qualified institutional buyers 0.35 times
Non institutional investors1.8 times
Retail2.6 times
Overall1.79 times

Dharmaj Crop Guard is engaged in the business of manufacturing, distributing, and marketing a wide range of agro chemical formulations such as insecticides, fungicides, herbicides, plant growth regulators, micro fertilisers and antibiotics to the B2B and B2C segments.

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The proceeds from the fresh issue are to be used towards setting up a manufacturing facility in Gujarat, fulfilling working capital requirements and repaying debts.

The company sells crop protection solutions to farmers to aid them in preventing crops from being damaged by insects. The company exports its products to over 20 countries in Latin America, East Africa, Middle East and Far East Asia.

Since the company’s revenues are dependent on farmers buying pesticides, any changes in farmer incomes, commodity prices, reduction in government subsidies and incentives can adversely impact its business.

“Any changes in the government policies relating to the agriculture sector such as the reduction of government expenditure towards agriculture, the withdrawal of or changes in incentives and subsidies provided to farmers, export restrictions on crops, adverse changes in commodity prices or minimum support prices could affect the ability of farmers to spend on crop protection products, which in turn could adversely affect our business and results of operations,” said the company in its draft red herring prospectus.

The grey market premium (GMP) of the company’s shares are at ₹55 per share. GMP is the premium at which IPO shares are traded in an unofficial market before they are listed on the stock exchanges.

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