Paradeep Phosphates Limited will open its three-day initial public offering (IPO) today and conclude on May 19. The fertiliser company has fixed the price band at ₹39-42 per share. It has raised a little over ₹450 crore from anchor investors, a day before the roll-out of its share sale.
As of 11:30 am on day 1, Paradeep Phosphates IPO was subscribed 0.14 with retail investors category booked 0.29x so far, BSE data showed.
The IPO comprises fresh issuance of equity shares worth ₹1,004 crore and an Offer-For-Sale (OFS) component of 11.85 crore equity shares by promoters and other selling shareholder. The government will be offloading its entire 19.55% stake in the company.
As per market observers, Paradeep Phosphates shares are commanding a premium (GMP) of ₹3 in the grey market today. The company’s shares are expected to list on stock exchanges BSE and NSE on May 27, 2022.
Proceeds of fresh issue will be used to partly finance the acquisition of the fertiliser manufacturing facility in Goa and payment of debt and general corporate purposes.
Should you subscribe to Paradeep Phosphates IPO?
“The company is a major player in the fertilizer sector and is expanding its capacity and backward integration operations. Also, it has raw material security through its promoters. Factoring in the business model, the demand for its products and the company fundamentals, we recommend that long term investors can subscribe,” said Arihant Capital in a note.
Paradeep Phosphates is primarily engaged in manufacturing, trading, distribution and sales of a variety of complex fertilizers such as Di-Ammonium Phosphate (DAP) and NPK fertilizers. Its fertilizers are marketed under some of the key brand names in the market, ‘Jai Kisaan – Navratna’ and ‘Navratna.
“The company is well-positioned to capture favorable Indian fertilizer industry dynamics supported by conducive government regulations. We recommended ‘Subscribe for listing gains’ to the issue,” said Dalal & Broacha Stock Broking.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
