The initial public offering (IPO) of Nova Agritech, an agrochemical company providing soil and crop solutions, will list on the stock exchanges today. The listing comes after the IPO saw strong investor demand last week, subscribing 109 times over.
Nova Agritech aims to list on both the BSE as well as NSE at 10am in a special pre-open session. The company has fixed the issue price at Rs 41 per share for its Rs 152.5 crore IPO which consisted of a fresh issue of Rs 57 crore and an offer for sale of Rs 95.5 crore by promoters and existing shareholders.
According to market experts, the strong subscription to the issue as well as positive market sentiment indicates the shares are likely to see a positive listing. Arun Kejriwal, founder of Kejriwal Research, expects the stock to list at a premium of Rs 14-20 per share over the issue price. This would put the listing price in the range of Rs 55-61 per share.
Kejriwal cites the robust response to the IPO from investors as well as the supportive secondary market mood for his positive outlook. The agrochemicals industry has also been witnessing steady growth trends which bode well for the company.
Other analysts also share a positive view on the company’s prospects. Amit Goel of Pace 360 feels the listing could be around Rs 66-72 per share based on annualized earnings for FY24. He notes the company has demonstrated growth over the past three fiscals despite operating in a competitive segment. The issue appears fully priced based on earnings but the stock has potential for upside in the long run.
Dhruv Mudaraddi of Stoxbox is also optimistic given the company’s strategic positioning to capitalize on India’s growing agri sector. Government support for farm productivity and initiatives like MSP are creating opportunities for sustained growth. The expansion plans funded via IPO proceeds also align well with industry trends.
Financially, Nova Agritech has posted robust revenue growth and improved margins, highlighting attractive metrics. Mudaraddi expects a robust listing gain of around 60% over the IPO price for allottees. From a medium term perspective, the stock also holds promise considering reasonable valuations.
Overall, positive reviews from analysts and the strong subscription response suggest Nova Agritech is poised for a healthy market debut. Allottees can expect solid listing premiums while long term investors see potential in the company given sector tailwinds and financial performance. However, some volatility cannot be ruled out in initial trades.
