Should You Buy on Day 2 of the Paradeep Phosphates IPO Given the GMP, Subscription Status, and Finan
Day 2 of the Paradeep Phosphates IPO: Subscriptions are now being accepted for the initial public offering of Paradeep Phosphates, the second-largest private sector producer of di-ammonium phosphates (DAP) and non-urea fertilizers in India. The initial public offering (IPO) for Paradeep Phosphates began on May 17 and will end on May 19. According to the material on the BSE website, the price range for Paradeep Phosphates' public offering has been set at Rs 39 to Rs 42 per equity share.
With a fresh issue of equity shares worth up to Rs 1,004 crore and an offer-for-sale (OFS) of 118,507,493 equity shares worth Rs 10 each, totaling Rs 497.73 crore, the business hopes to raise Rs 1,501 crore. The OFS is made up of up to 112.49 million government shares and 6.02 million shares by Zuari Maroc Phosphates Pvt Ltd (ZMPPL), a partnership between Zuari Agro Chemicals and OCP Group SA. ZMPPL owns 80.45% of the corporation, while the government has a share of about 19.55%.
Paradeep Phosphates IPO: Subscription Status
Retail investors have bid for 64% of the shares reserved for them as of 10:30 am, out of a total of 13.15 crore, while non-institutional investors have subscribed for 7% of the shares as of the Paradeep Phosphates IPO's opening. Against their limit of 8.07 crore shares, qualified institutional purchasers have subscribed for 4,900 shares of the issuance.
QIBs will receive about 50% of the net offer, followed by retail investors who will receive 35%, and non-institutional investors who would receive the remaining 15%.
Paradeep Phosphates IPO: GMP Today
Grey market experts report that the Paradeep Phosphates IPO GMP (grey market premium), which was Rs 3 yesterday, remained unchanged today. According to observers, the Paradeep Phosphates IPO GMP has been stable at specializes around Rs 3 for the past three days. They claimed that due to a trend reversal in the secondary market, the price of the Paradeep Phosphates IPO grey market may alter.
Investors were also advised by stock market specialists that GMP is an unofficial data set that is not governed. Therefore, individuals that adhere to GMP are urged to review the company's financials as well because the balance sheet will provide a clearer picture of the company's foundations.
Paradeep Phosphates IPO: Financials
In the nine months that ended in December 2021, Paradeep Phosphates declared a profit of Rs 362.781 crore, and operating revenue increased noticeably to Rs 5,183.94 crore. The issue's book-running lead managers are SBI Capital Markets, ICICI Securities, JM Financial, and Axis Capital.
Paradeep Phosphates, which was founded in December 1981, specializes in the production, trading, distribution, and sales of a variety of complex fertilizers, including DAP, three grades of nitrogen-phosphorus-potassium (NPK) fertilizers, namely NPK-10, NPK-12, and NP-20, zypmite, phospho-gypsum, and hydroflorosilicic acid (HFSA).
Paradeep Phosphates IPO: Should you Subscribe?
Choice Broking, a brokerage company, claims that Paradeep Phosphates is in a good position to take advantage of the favorable government rules and sector dynamics in India for fertilizers. Through efficient sourcing and backward-integrated facilities, it is enhancing raw material efficiency. Infrastructure, unused land, and a secure, accredited production facility are all assets of the business. the manufacturing facility's advantageous location and its substantial material storage,
Another advantage for the company is its handling and port infrastructure. Additionally, it has a solid parentage, an accomplished management team, and well-known stockholders. "PPL is requesting an FY21 EV/Sales multiple of 0.7x, which is at a considerable discount to the peer average of 1.1x, at a higher price band of Rs 42. We rate the issue as "SUBSCRIBE" in light of the aforementioned observations, it wrote in its comment.
"At the upper price band of Rs. 42, PPL is available at a P/E of 7.1x (FY22 annualized), which is favorable on a short- to medium-term basis," Geojit wrote in an IPO note. PPL is in a good position to take advantage of the favorable dynamics in the Indian fertilizer industry, which are supported by supportive government regulations. PPL is also driving raw material efficiency through backward integration of facilities and effective sourcing, and it has a well-known brand name supported by a sizable sales and distribution network. We rate the issue as "Subscribe" on a short- to medium-term basis due to PPL's expansion objectives, which include extending its foothold in western and southern India.