scorecardDharmaj Crop Guard lists at 12% premium but below grey market expectations
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Dharmaj Crop Guard lists at 12% premium but below grey market expectations

Dharmaj Crop Guard lists at 12% premium but below grey market expectations
Stock Market4 min read
  • Shares of Dharmaj Crop Guard listed at ₹266 against the allotment price of ₹237 per share.
  • The grey market expectation was a ₹55 premium per share.
  • The market capitalisation of the company stood at ₹899 crore.
  • The IPO saw strong demand from investors – it was subscribed 35.49 times.
Shares of Ahmedabad-based agrochemical company Dharmaj Crop Guard on Thursday listed on the bourses at a ₹29 premium over the issue price of ₹237 a share. The stock opened at ₹266.

This is lower than the grey market expectation of ₹55 premium per share. The grey market is an unofficial market where the IPO shares are traded before they are listed on the stock exchanges.

Meanwhile, the broader markets were volatile on Thursday a day after RBI’s monetary policy outcome that saw repo rate hiked by 35 basis points and indicated more rate hikes to come.

The market capitalisation of Dharmaj Crop Guard stands at ₹899 crore, according to BSE data.

The IPO saw strong demand from non-institutional and qualified institutional investors as they subscribed 52.29 and 48.21 times respectively.Overall, the IPO was subscribed 35.49 times.

This year, 32 IPOs made their stock market debut on the BSE mainboard. All except eight have given positive listing gains. Here are the top five IPOs with highest listing gains in 2022.
Companies Highest listing gains per share
Harsha Engineers International ₹155.90
Dreamfolks Services₹136.65
Aether Industries ₹134.75
DCX Systems ₹101.80
Kaynes Technology₹103.10
Source: BSE

Performance and business model of Dharmaj Crop Guard
The company’s initial public offering (IPO) mopped up ₹251 crore in total via a combination of fresh issue of shares and an offer for sale from existing shareholders.

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

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 regulator, micro fertilisers and antibiotics to the B2B and B2C segments.

It sells crop protection solutions to farmers to aid them in preventing crops from being damaged by insects. Also, 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 farmers income, 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.

Dharmaj Crop Guard competes with the likes of Rallis India and India Pesticides among others.

The net profit of the company has doubled to ₹20.96 crore in FY21 from ₹10.76 crore in FY20.

Particulars Total income Net profitEBITDA margin
FY21₹303 crore ₹20.96 crore 10.59%
FY20₹199 crore ₹10.76 crore 9.37%
FY19₹139 crore ₹5.02 crore 7.90%



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