Crop protection chemical manufacturer Heranba Industries share shot up 43.54 percent in the opening on March 4. It was largely on expected lines given the massive subscription received by its IPO, positive market conditions, strong balance sheet and robust return ratios compared with peers.
The stock started off a day at Rs 900 on the BSE as well as National Stock Exchange, registering gains of Rs 273 over issue price of Rs 627 per share.
At 10:03 hours IST, it was trading at Rs 887.15, up Rs 260.15 or 41.49 percent on the BSE, while on the National Stock Exchange, it traded at Rs 881.05, up 40.5 percent.
In terms of volume, Heranba traded with volume of 42.68 lakh shares on the NSE and 5.36 lakh shares on the BSE.
Heranba Industries garnered around Rs 625 crore through its public issue which was subscribed 83 times during February 23-25, 2021. The issue comprised a fresh issue of Rs 60 crore and an offer for sale of Rs 565.2 crore. The company will utilise net fresh issue proceeds of around Rs 50 crore for working capital requirements.
Incorporated in 1992, Heranba Industries manufactures intermediates, technicals and formulations. It is one of the leading domestic producers of synthetic pyrethroids with market share of 19.5 percent in 2019. Its pesticides range includes insecticides, herbicides, and fungicides.
In fact the company is present in the entire product value chain of the agrochemicals industry. It holds registrations for 18 technicals for manufacture and sale in India, 103 technicals & formulations for manufacture and sale in the export markets, and 169 formulations registered for manufacturing and sale in India.
The business verticals include domestic bulk sales of technicals (which contributed 31.6 percent to FY20 sales), technicals bulk exports (36.5 percent of sales), branded formulations (12.7 percent), formulations exports (12.8 percent) and insect control chemicals (6.4 percent).
Heranba has more than 9,400 dealers having access to multiple states in India. It has three manufacturing facilities in and around Vapi with a capacity of 14,024 MTPA.
“Benefiting from being an integrated pyrethroids manufacturer with a strong product pipeline, geographical expansion coupled with favourable macro factors are likely to drive growth. Apart from this, it has one of the strongest return ratios in industry and healthy balance sheet,” ICICI Direct said.
In the future, Angel Broking expects the company to gain market share and improve margins.
News Source:- Moneycontrol