Balaji Phosphates IPO opens on February 28 to raise ₹50.11 crore; check issue size, price band & more

The price band for this IPO is ₹66-70 per equity share, with a lot size of 2,000 shares. Arihant Capital Markets is the book-running lead manager for the issue, while Skyline Financial Services Private Ltd is the registrar.

The company will use the funds raised from the fresh issue to meet its capital expenditure and working capital requirements. Part of the net IPO proceeds will be used for general corporate purposes.

About the company

The company sells its products under the brand names ‘RATNAM’ and ‘BPPL’ to a diverse range of customers, including retailers, wholesalers, and state-owned cooperatives. Farmers are the end users of the products. The company’s products cater to farmers in Madhya Pradesh, Chhattisgarh, Maharashtra, Telangana, and Andhra Pradesh, supporting local agricultural growth.

The company’s manufacturing unit is located in Dewas, Madhya Pradesh, spanning around 12,600 square meters. As of March 31, 2024, its unit had installed capacities for the manufacture of 1,20,000 MT per annum of single super phosphate, 3,300 MT per annum of zinc sulphate and 49,500 MT per annum of NPK granulated & mixed.

The company has extensive experience in the fertiliser industry. Its demonstrated manufacturing capability, coupled with its ability to carefully choose quality dealers, ensures that its products are well-represented in the market.

Risks and concerns

• The company is dependent on certain key customers for a significant portion of its sales. The loss of any one of its key customers for any reason could adversely affect its business.

• Weather conditions like droughts, floods, cyclones, and pest infestations affect the company's business. Bad weather, especially early in the season, can lead to fewer crop plantations, resulting in lower demand for the company’s crop protection products.

• The company’s business demands a significant amount of working capital, with a substantial portion allocated to inventory management and trade receivables. Efficient working capital management is crucial for its operations.