Nova Agritech IPO: Issue Booked 109.36 Times, NII Portion Subscribed 224.06 Times

The Initial Public Offering (IPO) for Nova Agritech has commenced for subscriptions on January 23, 2024, and is set to close on January 25, 2024. The IPO’s pricing is set in the range of Rs 39 to Rs 41 per share. Through this IPO, Nova Agritech aims to generate Rs 143.81 crore. This public offering comprises a fresh issue of 2.73 crore shares valued at Rs 112 crore and an Offer for Sale (OFS) of 77.58 lakh shares totaling Rs 31.81 crore.

For investors looking to participate, the minimum bid is set at 365 equity shares, with subsequent bids in multiples of 365. Therefore, at the lower end of the price band, the minimum investment for retail investors stands at Rs 14,235, calculated as 365 shares times the lower price band of Rs 39 per share. At the higher price band, the minimum bidding amount escalates to Rs 14,965.

About the company

Nova Agritech, a manufacturer in the agricultural sector, specializes in agri-inputs including soil health management, crop nutrition, and crop protection products. The company adopts a technology-based and farmer-centric approach to its solutions. It boasts a substantial dealer network, encompassing around 11,722 dealers.

This network extends across 16 Indian states, specifically Andhra Pradesh, Telangana, Maharashtra, Karnataka, Madhya Pradesh, Rajasthan, Chhattisgarh, Tamil Nadu, Uttar Pradesh, Odisha, West Bengal, Bihar, Gujarat, Jharkhand, Uttarakhand, and Jammu & Kashmir. Additionally, Nova Agritech has a presence in Nepal, with operations in two regions there.

Beyond its national and Nepal operations, the company is making strides internationally. It has established marketing, distribution, and supply agreements with various third parties in Bangladesh, Sri Lanka, and Vietnam. However, Nova Agritech is currently in the process of acquiring the necessary permissions to commence business activities in these countries.

At 5:51 PM, the issue was booked 109.36 times as against 2.54 crore shares. The retail portion was subscribed 77.10 times as against 1.27 crore shares. The non-Institutional Investors (NIIS) portion was booked 224.06 times while the QIB portion was booked 79.31 times.

Price Band

The IPO’s pricing is set in the range of Rs 39 to Rs 41 per share.

Issue Size

The offering comprises a fresh issue of 2.73 crore shares valued at Rs 112 crore. It also has an Offer for Sale (OFS) of 77.58 lakh shares totaling Rs 31.81 crore.

IPO Reserve Portion

• Qualified Institutional Buyers (QIBs): About 50 percent of shares have been set aside
• Non-Institutional Investors (NIIs): 15 percent of the reservation in offer.
• Retail Investors: 35 percent of the shares shall be allocated towards retail investors.

Objectives of the Issue

The funds raised from the fresh issue component of Nova Agritech’s IPO, amounting to Rs 14.20 crore, are earmarked for investment in its subsidiary, Nova Agri Sciences. This investment will be specifically utilized for establishing a new formulation plant. Additionally, Rs 10.49 crore of the proceeds will be directed towards funding capital expenditure for Nova Agritech itself.

Moreover, a significant portion of the proceeds, Rs 26.65 crore, is allocated for addressing the working capital needs of Nova Agritech. Furthermore, Rs 43.36 crore will be invested in fulfilling the working capital requirements of Nova Agri Sciences, the subsidiary. These financial allocations indicate a strategic plan to enhance both Nova Agritech’s and its subsidiary’s operational capabilities and growth potential.

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