Dharmaj Crop Guard Limited’s Initial Public Offering to open on November 28, 2022, sets price band at ₹216 to ₹237 per Equity Share
(L-R) Mr. Jaman Talavia, Whole Time Director ,Mr. Rameshbhai Talavia, Chairman & MD, & Mr. Vishal Damodia, Chief Financial Officer of Dharmaj Crop Guard Limited)· Price Band of ₹216 – ₹237 per equity share bearing face value of ₹ 10 each (“Equity Shares”)
· Bid/Offer Opening Date – Monday, November 28, 2022 and Bid/Offer Closing Date – Wednesday, November 30, 2022.
· Minimum Bid Lot is 60 Equity Shares and in multiples of 60 Equity Shares thereafter.
· The Floor Price is 21.6 times the face value of the Equity Share and the Cap Price is 23.7 times the face value of the Equity Share.
Risks to Investors:
RISK FACTORS ASSOCIATED WITH OUR COMPANYARE:
1. We are dependent on a limited number of customers for a significant portion of our revenues. In Fiscals 2020, 2021 and 2022, and in the four months ended July 31, 2022, our top 10 customers contributed ₹399.98 million, ₹526.79 million, ₹757.65 million and ₹480.39 million, respectively of our total revenues from operations and represented 20.18%, 17.42%, 19.22% and 21.74%, respectively, of our total revenues from operations in such periods
2. Our business is subject to climatic conditions and is cyclical in nature. Seasonal variations and unfavourable local and global weather patterns may have an adverse effect on our business, results of operations and financial condition
3. We derive almost all of our revenues from the sale of Formulations in the agro-chemicals industry and any reduction in the demand for such products or the agro-chemicals industry could have an adverse effect on our business, results of operations and financial condition.
4. We are subject to strict technical specifications, quality requirements, regular inspections and audits by our customers and our failure to comply with the quality standards and technical specifications prescribed by such customers may lead to loss of business from such customers and could negatively impact our reputation, which would have an adverse impact on our business prospects and results of operations.
· The Weighted Average Cost acquisition of all Equity Shares transacted in last three years, 18 months and one year preceding the date of the RHP:
Period | Weighted Average Cost of Acquisition (in ₹)# | Upper End of the Price Band (₹[237]) is ‘X’ times the Weighted Average Cost of Acquisition# | Range of Acquisition Price: Lowest Price – Highest Price (in ₹)# |
Last 1 year | - | - | - |
Last 18 months | - | - | - |
Last 3 years | 0.32 | 740.63 | 2.89#-2.89 |
#As certified by KARMA& Co. LLP, Chartered Accountants vide their certificate dated November 22, 2022.
* Lowest price at which the Equity Shares were acquired, excluding through gift and bonus issue.
• The Price/Earnings ratio based on diluted EPS for Fiscal 2022 for our Company at upper end of the Price Band is [•] and Price/Earnings ratio of the average industry peer group as on the date of RHP is 24.04.
• Weighted Average Return on Net Worth for Fiscals 2022, 2021 & 2020 is 34.86% and Return on Net Worth for the four months period ended July 31, 2022 is 18.15% (not annualised).
• Average cost of acquisition of Equity Shares for the Selling Shareholders is as provided below and Offer Price at upper end of the Price Band is ₹ 20.40 per Equity Share.
Name of the Selling Shareholder | Average Cost of Acquisition per Equity Share |
Manjulaben Rameshbhai Talavia | 7.52 |
Muktaben Jamankumar Talavia | 7.19 |
Domadia Artiben | 1.98 |
Ilaben Jagdishbhai Savaliya | 1.98 |
• The two BRLMs associated with the Offer have handled NIL public offers in the past three Fiscal Years. ₹
Mumbai, November 23, 2022: Dharmaj Crop Guard Limited is an agrochemical company engaged in the business of manufacturing, distributing, and marketing of a wide range of agro chemicals such as insecticides, fungicides, herbicides, plant growth regulator, micro fertilizers and antibiotic to the B2C and B2B customers has fixed the price band at ₹216 to ₹237 per Equity Share for its maiden public offer. The initial public offering (“IPO” or “Offer”) of the Company will open on Monday, November 28, 2022, for subscription and closes on Wednesday, November 30, 2022. Investors can bid for a minimum of 60 Equity Shares and in multiples of 60 Equity Shares thereafter.
The issue with a face value of Rs 10 per equity share consists of a fresh issue of equity shares worth up to Rs 216 crore and an offer-for-sale (OFS) of up to 1,483,000 equity shares by existing shareholders. The offer also includes a reservation for subscription by eligible employees.
Incorporated in the year 2015, Dharmaj Crop Guard is also engaged in the marketing and distribution of agrochemical products under brands in-licensed, owned and through generic brands, to Indian farmers through its distribution network. Besides, it also provides crop protection solutions to the farmer to assist them to maximize their productivity and profitability.
Led by its Chairman and Managing Director, Rameshbhai Ravajibhai Talavia who has over 28 years of experience in the agrochemical industry. The company also exports its products to more than 25 countries across Latin America, East African Countries, Middle East and Far East Asia.
As of September 30, 2022, the Company had more than 154 institutional products that were sold to more than 600 customers. Its key customers include 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.
It has obtained 464 registrations for agrochemicals from the Central Insecticide Board and Registration Committee (CIB&RC), out of which 269 agrochemical formulations are for sale in India as well as for exports and 195 agrochemical formulations are exclusively for exports. Additionally, it has also applied for registrations of 18 agrochemical formulations and 17 agrochemical technicals with the CIB&RC, pending at various stages, according to the company’s RHP.
DCGLs revenue from operations grew 30.36% to Rs. 394.21 crore for the fiscal 2022 against Rs. 302.41 crore for the fiscal 2021, primarily due to increase in sales of its branded products, institutional sales and addition of more dealers and customers, while its net profits grew 36.88% from Rs. 20.96 crore in FY21 to Rs. 28.69 crore in FY22.
In case of any revision in the Price Band, the Bid/Offer Period will be extended by at least three additional Working Days after such revision in the Price Band, subject to the Bid/Offer Period not exceeding 10 Working Days. In cases of force majeure, banking strike or similar circumstances, our Company and Selling Shareholders may, for reasons to be recorded in writing, extend the Bid /Offer Period for a minimum of three Working Days, subject to the Bid/Offer Period not exceeding 10 Working Days. Any revision in the Price Band and the revised Bid/Offer Period, if applicable, shall be widely disseminated by notification to the Stock Exchanges, by issuing a press release, and also by indicating the change on the respective websites of the BRLMs and at the terminals of the members of the Syndicate and by intimation to Designated Intermediaries and the Sponsor Bank, as applicable. This Offer is being made in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”), read with Regulation 31 of the SEBI ICDR Regulations. This Offer is being made through the Book Building Process in accordance with Regulation 6(1) of the SEBI ICDR Regulations wherein, not more than 50% of the Net Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers (“QIBs”) (the “QIB Portion”), provided that our Company in consultation with the BRLMs and Selling Shareholders, may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis (“Anchor Investor Portion”), out of which one-third shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price, in accordance with the SEBI ICDR Regulations. In the event of under-subscription, or non-allocation in the Anchor Investor Portion, the balance Equity Shares shall be added to the QIB Portion. Further, 5% of the Net QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the Net QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders (other than Anchor Investors), including Mutual Funds, subject to valid Bids being received at or above the Offer Price. However, if the aggregate demand from Mutual Funds is less than 5% of the Net QIB Portion, the balance Equity Shares available for allocation in the Mutual Fund Portion will be added to the remaining Net QIB Portion for proportionate allocation to QIBs. Further, not less than 15% of the Net Offer shall be available for allocation to Non-Institutional Bidders (“Non-Institutional Portion”) (of which one third of the Non-Institutional Portion shall be reserved for Bidders with an application size between ₹ 0.20 million up to ₹ 1 million and two-thirds of the Non-Institutional Portion shall be reserved for Bidders with an application size exceeding ₹ 1 million) and under-subscription in either of these two sub-categories of Non-Institutional Portion may be allocated to Bidders in the other subcategory of Non-Institutional Portion, subject to valid Bids being received at or above the Offer Price and not less than 35% of the Net Offer shall be available for allocation to Retail Individual Investors (“RIIs”) in accordance with the SEBI ICDR Regulations, subject to valid Bids being received from them at or above the Offer Price. All Bidders, other than Anchor Investors, are mandatorily required to participate in the Offer through the Application Supported by Blocked Amount (“ASBA”) process by providing details of their respective ASBA Accounts (as defined hereinafter) including UPI ID in case of UPI Bidders in which the Bid Amount will be blocked by the Self Certified Syndicate Banks (“SCSBs”) or the Sponsor Bank, as the case may be. Anchor Investors are not permitted to participate in the Anchor Investor Portion through the ASBA process. For details, see “Offer Procedure” on page 339 of the RHP.
Elara Capital (India) Private Limited and Monarch Networth Capital Limited are the book running lead managers and Link Intime India Private Limited is the registrar to the Issue.
RHP Link: https://www.sebi.gov.in/filings/public-issues/nov-2022/dharmaj-crop-guard-limited-red-herring-prospectus_65339.html