IPO Alert: Heranba IPO open from 23-25 February 2021

Blog | IPO

Key highlights
Price band: ₹626-627 per equity share

Lot size: 23 shares
IPO size: ₹625 crore
Cost per lot: ₹14,421
Issue opens: 23 February 2021
Issue closes:  25 February 2021
Basis of allotment date: 2 March 2021
Initiation of refunds: 3 March 2021
Credit of shares to Demat account: 4 March 2021
Expected listing date: 5 March 2021

About the company
Before getting started with the IPO, let’s get two scientific terms out of the way. First, pyrethrins. These are naturally occurring insecticides derived from chrysanthemum flowers. Second, pyrethroids. These are chemicals that are similar to pyrethrins and are used to control pest insects in farms, homes, restaurants, hospitals and schools.

Now, 17,747 tonnes of pyrethroids was produced in India in 2019, and that volume grew at a CAGR of 7.2% during 2014-2019. For perspective, here’s a look at the market for these chemicals. 

Market size CAGR 2014-19
Domestic $110 million (~₹801 cr) 7.4%
Export $203 million (~₹1,478 cr)% 7.9%
Total $313 million (~₹2,279 cr) 7.7%

That brings us to the next initial public offer of 2021: Heranba Industries. The company is a manufacturer, exporter and marketer of crop protection chemicals and is based in Vapi, Gujarat. It is one of the leading domestic producers of synthetic pyrethroids. Its product range includes insecticides, herbicides, fungicides and public health products for pest control. 

The company started its manufacturing activity in 1996 with the production of chemical intermediates used to make pesticides. Today, it is present in the entire product value chain of the agrochemicals industry i.e. intermediates, technicals and formulations. The company exports its products to over 60 countries as of FY20, with over 35% of its exports going to China. 

In 2019, the company was the market leader in the Indian pyrethroids market, with a market share of 19.5% of the total Indian pyrethroids production values. Second in line was Tagros Chemicals India Limited (14.8%), while Hemani Industries Limited (9.9%) was third.

The company has shown steady growth but saw a dip in FY20. Here’s a look at its financials. 

Financials FY18 FY19 FY20 H1, FY21
Revenue from operations  (₹ cr) 745 1,004.4 951.3 618.3
Profit (₹ cr) 46.8 75.4 97.7 66.3

About the issue

The IPO comprises a fresh issue of ₹60 crore and an offer for sale of 9,015,000 shares (₹565 crore), through which promoters Sadashiv Shetty and Raghuram Shetty are diluting their stake.

IPO allocation quota

QIB HNI Retail
50% 15% 35%

To know more about the IPO, read its red herring prospectus here. The issue opens on 23 February and you can subscribe to the IPO of Heranba Industries with Upstox here. Meanwhile, we’ll keep you posted on all the updates about this IPO and the public issues that follow, so stay tuned!