Dharmaj Crop Guard Files for Rs.300 Cr IPO

Gujarat based agrochemicals company, Dharmaj Crop Guard, gas filed draft red herring prospectus with SEBI for its proposed Rs.300 crore IPO. This IPO will comprise of a fresh issue of Rs.216 crore and an offer for sale of approximately Rs.84 crore. The company will sell a total of 14.83 lakh shares by existing promoters and early investors in the company to the public as part of the offer for sale part of the IPO.

The company is yet to firm up the size of the issue but it could look at an outer limit of Rs.300 crore to be raised via the IPO. The company may also explore the possibility of a pre-IPO placement of part of the issue ahead of the IPO. If this pre-IPO placement is successful, then the company is likely to reduce the size of the IPO proportionately. The Dharmaj Crop Guard IPO will also include a reservation to the employees of the company.

Dharmaj Crop Guard is engaged in the manufacture, distribution and marketing of a wide range of agrochemical products that cater to enhancing production and productivity of agricultural output in India and abroad. It also has a strong and robust export franchise and currently reaches out to more than 20 countries across the world. Its focus products include herbicides, fungicides, insecticides, micro fertilizers, and antibiotics for plants.

The fresh issue component of approximately Rs.216 crore will be used to fund the proposed capital expenditure for setting up its manufacturing plant in Saykha Bharuch in the state of Gujarat. That is about 150 kilometres from its headquarters located at Ahmadabad. Part of the fresh proceeds will also be used by the company to repay some debt in the books and also for working capital and for general purposes.

The agrochemicals franchise of the company has a strong market that is spread across Latin America, East Africa, Middle East and even Far East Asia. This is over and above the very robust India business that the company already has in place. The SEBI approval process normally takes about 2-3 months so realistically, this IPO would happen in the next fiscal year as the SEBI approval for the DRHP is unlikely to come before March this year.

The issue of Dharmaj Crop Guard will be lead managed by Elara Capital India Private Limited and Monarch Networth Capital Limited. They will also act as the book running lead managers (BRLMs) to the issue.

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