Paradeep Phosphates IPO | Review

Spread the love

Paradeep Phosphates Limited has come up with an initial public offer (IPO). It will open on May 17-19, 2022 at Rs.39-42 a share. The IPO issue size is around Rs.1,502 crore. The minimum bid will be for 350 shares and in its multiples thereafter.

Overview

Paradeep Phosphates Limited was incorporated in 1981. It is the 2nd largest private sector manufacturer of non-urea fertilizers in India. It is also 2nd largest private-sector manufacturer in terms of Di-Ammonium Phosphate (“DAP”) for December 31, 2021. The company is primarily engaged in manufacturing, trading, distribution, and sales of a variety of complex fertilizers such as DAP, three grades of Nitrogen-Phosphorus-Potassium (“NPK”), Zypmite, Phospho-gypsum and Hydrofluorosilicic Acid (“HFSA”). It is also engaged in the trading, distribution, and sales of Muriate of Potash (“MOP”), Ammonia, Speciality Plant Nutrients (“SPN”), and City compost. Our fertilizers are marketed under some of the key brand names in the market ‘Jai Kisaan – Navratna’ and ‘Navratna’.

The company’s manufacturing facility is located in Paradeep, Odisha, and includes a DAP and NPK production facility. It has established an extensive sales and distribution network. Its product’s distribution is across 14 states in India through 11 regional marketing offices and 468 stock points. Currently, the company has a network of 4,761 dealers and 67,150 retailers, catering to over five million farmers in India. The company sources its raw materials Phosphate Rock, Phosphoric acid, Sulphur, Ammonia, and MOP locally & from various other countries such as Morocco, Jordan, Qatar, and Saudi Arabia.

Promoters

Zuari Maroc Phosphates Private Limited	Zuari Agro Chemicals Limited
OCP (Office Chérifien des Phosphates)	President of India, GoI

Promoter Holding

Pre-Issue Shareholding – 100%

Post-Issue Shareholding –

Strength & Weakness

Strengths	Weaknesses
Favorable Indian fertilizer industry	Dependent on the agricultural sector
Experienced management team	Business is subject to climatic conditions
Driving efficiency through backward integration	Business is cyclical in nature
Secure and certified manufacturing facility	Fertiliser industry in India is a regulated
Established brand name	Dependent on a limited no. of suppliers
Extensive sales and distribution network	Negative cash flows in the past
2nd largest manufacturer of Phosphatic fertilizer	Intensely competitive industry

Competitors

Chambal Fertilisers	Deepak Fertilisers	GNFC
Rama Phosphates Ltd.	Coromandel International	Tata Chemicals

Company Financials

Year	Revenue (in Crore)	Profit (in Crore)
31-Mar-2019	4,397.21	158.96
31-Mar-2020	4,227.78	193.22
31-Mar-2021	5,183.94	223.27
31-Dec-2021	5,973.69	362.78

Object of Issue

1) Part-financing the acquisition of the Goa Facility

2) Repayment/prepayment of certain of our borrowings.

3) General corporate purposes.

Paradeep Phosphates IPO Lot Size

Application	Lot	Shares	Amount
Minimum	1	350	Rs.14,700
Maximum	13	4,550	Rs.1,91,100

Paradeep Phosphates IPO Details

IPO Opening Date	May 17, 2022
IPO Closing Date	May 19, 2022
Face Value	Rs.10 per Equity Share
IPO Price	Rs.39-42 per share
Market Lot	350 shares
Minimum Order Quantity	350 shares
Listing At	NSE, BSE
No. of shares offered (OFS)	1,18,507,493 shares
Issue Size	Up to Rs.1,502 Crore
QIB Shares Offered	50% of the offer
Retail Shares Offered	35% of the offer
NII/HNI Shares Offered	15% of the offer

Paradeep Phosphates IPO Timetable

IPO Date	May 17-19, 2022
Allotment Date	May 24, 2022
Initiation of Refunds	May 25, 2022
Credit of share to Demat a/c	May 26, 2022
IPO Listing Date	May 27, 2022