Heranba Industries IPO : Every Detail To Know Before Subscribing For It

Heranba Industries IPO

Heranba is involved actively in the field of agrochemicals. It is one of the largest farmer aid companies. The company works to maximise the output of farmers by the usage of its innovative range of products. The company works in direction of improving the Crop’s productivity. This in turn benefits the health of individuals which is the end goal of the company. The company has a wide range of products used as insecticides, Fungicides, Herbicides and Intermediaries. Hernaba is a major exporter with great domestic as well as foreign networking. It has more than 8500 dealers across 16 states serving the rural needs for farming. The company also has an exporting network in more than 63 countries.

The company has 3 manufacturing plants present at Vapi in Gujarat. Heranba Industries has a manufacturing capacity of more than 14000 MTPA. The company also has an in-house R&D department working for constant technological updation and manufacturing better products.

IPO Details

The IPO will hit the market for subscription on 23rd March, 2021. It is a book built issue and the Face value per share is 10 rs per share. The price band decided is 626 to 627 Rs and the grey market premium is 25%. The company’s minimum lot size consists of 23 shares. The issue size for the IPO is 625.24 crore Rs. Out of the issue size 60 Crore Rs. is given away as fresh issue and the rest of shares amounting to 565.24 crore Rs. would be given as Offer for sale. The IPO will be listed on both the exchanges and the Listing date set is 5th March,2021. The registrar for the company is Bigshare services Pvt. Ltd.

Tabular Representation of IPO Details

IPO OPENING DATE 23rd February, 2021
IPO CLOSING DATE 25th February, 2021
ISSUE TYPE Book built issue
Face Value per share Rs. 10 per share
IPO price band 626 Rs. – 627 Rs.
LOT SIZE 23 shares
MINIMUM ORDER QUANTITY 23 shares
ISSUE SIZE 625.24 crore Rs. with F.V. of 10 Rs. each
OFFER FOR SALE 565.24 crore Rs.
FRESH ISSUE 60 Crore Rs.
LISTING AT NSE, BSE
LISTING DATE 5th March, 2021

Important Dates

IPO OPENING DATE 23rd Feb, 2021
IPO CLOSING DATE 25th Feb, 2021
IPO ALLOTMENT DATE 2nd March, 2021
REFUNDS 3rd March, 2021
DEMAT A/C CREDITED ON 4th March, 2021
IPO LISTING DATE 5th March, 2021

The IPO is set to launch on 23rd Feb, 2021. The IPO closes for subscription on 25th Feb, 2021. The allotment status would be finalised around 2nd March, 2021 and the refunds for those who cannot get the IPO subscription will be initiated on 3rd March, 2021. The DEMAT A/c of customers will be credited with the shares on 4th March, 2021 and the IPO would be listed on both the changes on 5th March, 2021.

Promoter and Lead Managers

The company has Sadashiv Shetty and Raghuram Shetty as its promoters. The promoter holding pre-IPO launch is 98.1%. This ratio will go down to 74.1% after IPO launch.

The lead managers for the IPO are :

  • Emkay Global Financial Services Ltd.
  • Batlivala and Karani Securities India Pvt. Ltd.

The minimum lot size for the IPO is 23 shares amounting to Rs. 14420 Rs. The maximum lot size that one can hold is 299 shares. This lot amounts to Rs. 187473.

Objectives for the IPO

The objectives behind the IPO are :

  • Company has lately realized that it would need more capital to maintain the daily working requirements of the firm. Hence the primary reason for being the IPO is for daily working requirements.
  • The company may also utilize the same for general corporate purposes.
  • The company may utilize the money for meeting the expenses for the public issue.

By the objectives mentioned by the company it seems that the COVID has left a deep impact on the company. The company has been facing cash crunch requirements. The business loss resulting from COVID situation has caused great loss and the company needs more money inflow for maintaining the production line afloat.

Company Financials

PARTICULARS (in million Rs.) 2019-20 2018-19 2017-18
ASSETS 6248 5605 4505
REVENUE 9679 10119 7506
NET PROFIT 979 755 469

The company is not doing very well in a consistent manner. The company initially had an asset base of 4505 crore Rs. and which increased to 5605 crore Rs. this means that the company’s debtors as well as its properties increased.  Also it is a fruitful relation between net profit and revenue of the company. This says that when the company’s revenue almost increased by 3000 crore Rs the net profit increased by 300 crore Rs. Now if we look at the year forward the revenue has decreased but assets have kept on increasing and somehow the company has managed to increase its net profit.

The figures from the COVID situation indicate that the company’s assets have grown but the revenue has not kept pace with it. The revenue generation upto September’2020 is just 6000 crore Rs. which is less in comparison to the increase in asset base. However the income generated so far is 663 crore Rs which is quite impressive from the company.

The company may have taken a hit from COVID for cash flow arrangements and hence to boost the liquidity the company is set to raise the IPO which is one of the major reasons for the public issue as well.

Product Line

The company has variety of products under the following categories :

  • Insecticides
  • Fungicides
  • Herbicides
  • Plant Growth
  • Technical
  • Intermediaries etc.

Some of the famous products from the company are :

  • Alpha Shakti
  • Buprostar
  • Cargo
  • Benzo
  • Cypra
  • Chiliron
  • Cypra dust
  • Delphos
  • Eagle
  • Fenthuron
  • Herashakti
  • Mantra
  • Sooper
  • Atira
  • Finox Glory
  • Shado
  • Proton and many more…….

Pros

  • Major exporter for agro chemicals
  • Has a vast product line with multiple brand names
  • Company has a solid asset base and a latest installation of a manufacturing facility in Vapi in Dec, 2020.
  • The company has an increasing revenue stream as well as net profit.
  • In house R&D and Expertise with more than 25 years of experience
  • Large customer base
  • Great production numbers (14000 MTPA)
  • Well distributed networking channel with more than 8500 dealers in more than 16 states and 1 UNION TERRITORY.
  • The company has good global networking as well.
  • It is a government recognised company for exporting.

Cons

  • Needs more capital due to liquidity requirements
  • The revenue is not stable as in the past two years the assets have increased but the revenue have not increased.
  • The company is facing problems to manage the constant run of its newly opened facility due to COVID hit.

How to Apply for IPO with Zerodha

It is very easy to apply for an IPO now if you have a DEMAT account with Zerodha. Follow the steps below for the same :

  1. Logging into Zerodha console through its website or KITE platform.
  2. Clicking the IPO link present in the Portfolio section
  3. Click the Heranba Industries IPO button and press the BID button
  4. Entering the details asked for like UPI ID, Quantity and price
  5. Submit the application form of IPO
  6. Visiting the application of UPI for approving the transaction

Now, applying for IPO online is possible with most of the Discount and online brokers.

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