The initial public offering of Nova Agritech Ltd, a manufacturer of agricultural inputs, will close today. The IPO has already received a strong response from retail investors and high net worth individuals, as it was subscribed 33.87 times. The IPO received bids for 86.09 crore shares against 2.54 crore shares (net off anchor portion) on offer.

The IPO comes at a price band of ₹39-41. Investors can bid for a minimum of 365 shares.

While not more than 50 per cent is reserved for institutional investors, retail investors and HNIs can bid a minimum of 35 per cent and 15 per cent, respectively, of the issue.

The category for non-institutional investors received subscriptions 71.23 times, while the portion for retail individual investors was subscribed 36.28 times. The qualified institutional buyers (QIBs) part was subscribed 1.12 times.

The ₹143.81-crore IPO from the soil health management, crop nutrition and crop protection products company consisted of a fresh issue of ₹112 crore and an offer-for-sale (OFS) of up to 77,58,620 shares (worth ₹31.81 crore) by the selling shareholder, Nutalapati Venkatasubbarao.

The stock is proposed to be listed on both the BSE and NSE.

Anchor investors

On Friday, the company raised ₹43.14 crore from anchor investors as part of IPO fundraising exercise.

The company has allocated about 1.05 crore shares at ₹41 a share to anchor investors, including Quantum-State Investment Fund, Neomile Growth Fund, AG Dynamic Funds limited and Saint Capital Fund.

Utility of funds

The company plans to use the net proceeds worth ₹14.20 crore for investment in its subsidiary Nova Agri Sciences to set up a new formulation plant, ₹10.49 crore for funding capital expenditure by Nova Agritech and towards expansion of its existing formulation plant.

The company will utilise ₹26.65 crore for funding the working capital requirements of Nova Agritech and ₹43.36 crore for investment in Nova Agri Sciences’ working capital requirements.

The 16-year-old company, founded by Sambasivarao Yeluri and Kalyana Chakravarthy, manufactures, distributes, and markets soil health management products; crop nutrition products; bio stimulant products; bio pesticide products; Integrated Pest Management (IPM) products; and crop protection products.

The company registered a revenue of ₹210.55 crore in the financial year 2022-23, showing a growth of 13.47 per cent over the previous year’s revenue of ₹185.56 crore. “The net profit increased by 49.69 per cent to ₹20.49 crore in 2022-23 from ₹13.69 crore in the previous year,” it said.

For the six months ending September 30, 2023, the company clocked a revenue of ₹103.22 crore and a net profit of ₹10.38 crore.