Nova Agritech Limited (NAL) has filed its draft red herring prospectus (DRHP) with the capital markets regulator Sebi to raise funds via an initial public offering (IPO).
Telangana-based agri-input player Nova Agritech manufactures, distributes and markets a wide range of product categories consisting of soil health management products; crop nutrition products; bio stimulant products; biopesticide products; Integrated Pest Management (IPM) products; and crop protection products among others.
The company proposes to issue fresh equity shares worth Rs 140 crore and offer-for-sale (OFS) of up to 77,55,620 equity shares with a face value of Rs 2 each. Nutalapati Venkatasubbarao will offload the entire OFS stake.
The company and the selling shareholders, in consultation with the BRLMs, may consider a pre-IPO placement of equity shares of up to Rs 25 crore. If such placement is completed, the issue size will be reduced accordingly.
The company has reserved 50 per cent of equity shares for qualified institutional bidders, whereas 15 per cent of shares will be allocated to non-institutional bidders. The remaining 35 per cent of shares will be allocated to retail bidders. Shares of the company will be listed on both BSE and NSE.
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The net proceeds from the issue will be utilized towards investment in the subsidiary setting-up a new formulation plant, expansion of the existing formulation plant, working capital requirement and general corporate purposes. Proceeds from OFS will go to selling shareholder entities.
Incorporated in 2007, Nova Agritech has a network of more than 6,200 dealerships, spread across 16 states across the country. It has leased a 66.11-acre land in Valaparla village in Andhra Pradesh to test the effectiveness of its products on various crops to focus on R&D.
It has contracts in place to supply, market, and distribute with certain third parties in Bangladesh, Sri Lanka, and Vietnam, and is presently awaiting the appropriate approval to open for business in these countries.
Nova Agritech has a total of 629 product registrations, comprising 7 registrations in the soil health management category, 168 registrations in the crop nutrition category, 4 registrations in biopesticides category and 450 registrations in the crop protection category by its subsidiary, as on January 31, 2023.
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Nova Agritech’s revenue from operations increased by 16 per cent to Rs 185.57 crore for the financial year 2021-22, whereas Profit after tax increased by 117 per cent to Rs 13.69 crore for the given fiscal. For the six months ending September 30, 2022 revenue from operations stood at Rs 81.65 crore and profit after tax stood at Rs 6.86 crore.
Keynote Financial Services Limited and Bajaj Capital Limited are the book-running lead managers to the issue, whereas Bigshare Services has been appointed as the registrar.