Paradeep Phosphates IPO List: Paradeep Phosphates shares made their D-street debut today. Paradeep Phosphates was listed at Rs 43.55, a premium of 4 percent above the issue price of Rs 42 on BSE. On the National Stock Exchange (NSE), the counter stood at a premium of nearly 5 percent at Rs 44 compared to the given issue price. On the last day of subscription, 1.75 times were subscribed to the public offer. The public offering was subscribed for 3.01 times in the qualified institutional buyers (QIB) category, 1.37 times in the retail investor category and 0.82 times in the non-institutional investor category (NII).
The company plans to use the net proceeds of the new issuance to co-finance the acquisition of the manufacturing facility in Goa, the repayment/prepayment of a portion of its loans and general corporate purposes. The company does not receive any proceeds from the OFS portion, the proceeds of which will go entirely to the initiators.
Founded in 1981 and based in Paradeep, Orissa, the company has raised Rs 1,501 crore through a combination of a new share issue totaling Rs 1,004 crore and an offer for sale (OFS) of 118,507,493 shares of Rs 10 each combined rising to Rs 497.73 crore. The company had set a price range of Rs 39-42 per share of shares with a par value of Rs 10 each and the shares were allocated to the investors at the top end of the price range. Paradeep Phosphates is the second largest private sector producer of non-urea fertilizers and diammonium phosphates (DAP) in India.
As for the financial data of Paradeep Phosphates, it has made a profit in the past and for FY21, the company reported revenue of Rs 5164.73 crore as against Rs 4192.87 crore a year ago. The net profit for the period was Rs 223.27 crore versus Rs 193.22 crore last year. For the nine months ending December 2021, the company has already surpassed the revenue it achieved in FY21. The company posted revenue of Rs 5,959.7 crore during the first nine months of FY22 and net profit was also higher at Rs 362.78 crore.
What should investors do after listing – buy, hold or sell?
Santosh Meena, Head of Research, Swastika Investmart Ltd., said: “Paradeep Phosphates Ltd has made its debut at Rs. 44 or 5 percent above the issue price. The company’s lukewarm listing can be attributed to current market sentiments and a lukewarm response of the investors.The company is one of the largest manufacturers of urea-free fertilizers and has competitive advantages in backward integration and location.However, the company operates in a highly regulated sector, with a very high reliance on the agricultural sector; the company is subject to climatic conditions and is cyclical in nature Nevertheless, the issue was reasonably priced and interested investors can accumulate the shares for the long term after listing.Those who have applied for listing gains can maintain a stop-loss of Rs 40.
Manoj Dalmia, founder and director of Proficient equity Private Limited, said: “Given the government’s initiatives in the agricultural sector, this company has good prospects for the future. The issue is too reasonably priced and is worth considering in the long run.”
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