Shares of India Pesticides today made a strong listing on BSE and NSE with stock price rising to Rs368 as compared the issue price of Rs296. The IPO of India Pesticides Limited was subscribed 29 times, with retail investor segment at over 11 times. The Qualified Institutional Buyers (QIBs) category was subscribed 42.95 times and non-institutional investors 51.88 times. The offer was in a price range of Rs290-296 per share.

Commenting on its listing, Sneha Poddar, AVP, Research, Broking & Distribution, Motilal Oswal Financial Services, said: “It had seen healthy overall subscription of 29x, given its presence in the fast growing agrochemical space. IPL is the sole Indian manufacturer of five Technicals and among the leading manufacturers globally for Captan, Folpet and Thiocarbamate Herbicide, in terms of production capacity. Global agro-chemicals market is expected to grow at 7?GR to USD86bn by 2024 and IPL is well placed to tap this opportunity."

She added: "Technicals in India which is strongly driven by export led demand and contract manufacturing, is expected to grow at 8?GR. With China 1 strategy, it opens huge opportunity for Indian players like IPL. IPL plans to tap this opportunity by manufacturing complex off patented technicals, wherein 19 Technicals are expected to go off-patent between CY19-26 (opportunity of >USD4.2bn). We like IPL given its presence in fast growing agrochemical space, diversified product portfolio and robust financials. Expanding product portfolio, growing customer base and increasing wallet share of existing customers can help IPL maintain its growth momentum. It is reasonably valued at 30.8x FY21 P/E, vis-à-vis peers, while it enjoys higher RoE of 36%."

The initial public offer (IPO) comprised a fresh issue of Rs100 crore and an offer for sale of Rs700 crore. Ahead of the IPO, India Pesticides had raised Rs240 crore from anchor investors. Proceeds from the fresh issue would be used towards funding the working capital requirements and general corporate purposes.

India Pesticides or IPL is an R&D-focused agrochemical technical company with manufacturing facilities located at Lucknow and Hardoi in Uttar Pradesh. As of FY21, 56.7% of total revenue is generated from exports to over 25 countries.

It enjoys strong customer base including major crop protection players like Syngenta Asia Pacific Pte.Ltd, UPL ltd. etc. As of FY21, about 57% of revenue is contributed from its top 10 customers.

Many brokerages had recommended buy India Pesticides issue, saying that the company is well positioned to capitalize on opportunities in agrochemical sector backed by proposed capacity expansions, R&D capabilities and adoption of China plus one strategy by global companies.

"At the upper price band of Rs.296, IPL is available at a P/E of 25.4x (diluted) which appears to be reasonably priced. We assign a “Subscribe" rating for the issue on a short to long-term basis considering strong R&D, positive agrochemical sector outlook, negligible debt, healthy margins and return ratios of the company," Geojit said in a recent note.

Another brokerage Anand Rathi said: "Going forward with the planned expansion and lowering debt, we are also confident that India Pesticides will maintain the growth levels which is mirroring in the pricing of the IPO. Further in the recent past, Company has a robust track record of performance and has been generating positive cash flow. We are positive on the long-term prospects of the Company. Hence, we recommend a "Subscribe" rating to this IPO."