Business strategy

Paradeep Phosphates IPO GMP, Subscription, Financials. Should you Invest on the Last Day?

Paradeep Phosphates IPO Last Day: Today is your last chance to subscribe to the initial public offering (IPO) of Paradeep Phosphates, India’s second-largest manufacturer of non-urea fertilisers and di-ammonium phosphates (DAP) in the private sector. The Paradeep IPO has been open for subscription since May 17 and will close today, May 19. The fertiliser company has fixed the price band of its public offer at Rs 39 to Rs 42 per equity share. The company plans to utilize Rs 1,004 crore proceeds from its fresh issues to partly finance the acquisition of fertiliser manufacturing facility in Goa and repayment of debt.

Paradeep Phosphates IPO: Subscription Status

Data given on NSE showed that the Paradeep IPO received cumulative bids of 13,63,79,600 equity shares against the offered size of 26,86,76,858 equity shares – subscribing by 51 per cent. The issue was lifted by retail individual investors (RIIs) as the category subscribed by 95 per cent with bids of 12,49,10,100 equity shares on a consolidated basis against the reserved portion of 13,15,80,187 equity shares.

On the other hand, the portion kept for non-institutional investors subscribed by merely 20 per cent against the reserved size. However, there were barely any demands from qualified institutional buyers (QIBs) as on Day 2 – bids of just 14,700 equity shares were made by the category against the reserved size of 8,07,05,162 equity shares. FIIs, DIIs, and mutual funds have made no bidding up till now in the IPO.

Under the IPO, 50 per cent of the total size is reserved for QIBs, 15 per cent is kept for NIIs, and the remaining 35 per cent is allocated to RIIs. The IPO is a 100 per cent book building and has a price band of Rs 39 to Rs 42 per equity share. The bid lot is in 350 Equity Shares and in multiples thereof.

Paradeep Phosphates IPO: Financials

In the first 9 months of FY22, Paradeep Phosphates Limited has reported a net profit of Rs 362.78 crore whereas its turnover in this period stands at Rs 5973.69 crore. The fertilizer maker company has reported net profit of Rs 158.96 crore on a turnover of Rs 4397.21 crore in FY19 whereas its net profit in FY2020 surged to Rs 193.22 crore. In FY21, Paradeep Phosphates Limited reported a net profit of Rs 223.27 crore against the net turnover of Rs 5183.94 crore, according to an IIFL report. So, the company has been continuously logging rise in profit for last three fiscals.

Paradeep Phosphates, incorporated in December 1981, is primarily engaged in manufacturing, trading, distribution and sales of a variety of complex fertilisers such as DAP, three grades of nitrogen-phosphorus-potassium (NPK), namely NPK-10, NPK-12 and NP-20, zypmite, phospho-gypsum and hydroflorosilicic acid (HFSA).

Paradeep Phosphates IPO: GMP Today

According to grey market observers, Paradeep Phosphates IPO GMP (grey market premium) today is Rs 3, which is unchanged from its yesterday’s grey market premium. Market observers said that Paradeep Phosphates IPO GMP today is Rs 3 which means the grey market is expecting that Paradeep Phosphates IPO listing would be around Rs 45 ( Rs 42 + Rs 3), which is around 7 per cent higher from Paradeep Phosphates IPO price band.

Paradeep Phosphates IPO: Is it worth subscribing to the IPO?

Giving subscribe tag to Paradeep Phosphates IPO, Astha Jain, Senior Research Analyst at Hem Securities said, “Company is bringing the issue at price band of Rs 39-42 per share at p/e multiple of 11x on FY21 eps basis. Company being second largest private sector manufacturer of Phosphatic fertilizers in India is well-positioned to capture favorable Indian fertilizer industry dynamics supported by conducive government regulations. Company with established brand name backed by an extensive sales and distribution network has strong parentage, experienced management team and prominent shareholders is looking decent investment avenue for long term investment. Hence we recommend “Subscribe” on issue for long term.”

Disclaimer: The views and investment tips by experts in this report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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