Stellar Start: Nova AgriTech lists at 36% premium at Rs 56 per share on the BSE

Nova AgriTech Limited specialises in manufacturing crop-enhancing products, primarily focusing on soil health, plant nutrition, and crop protection, debuted on the Indian stock market today.

Upon its debut on the BSE, the stock opened at Rs 56 per share, reflecting an impressive 36.60% premium compared to the final issue price of Rs 41 per share. The market capitalisation of the company stands at Rs 518 crore on the BSE. On the other hand, it debuted at Rs 55 a piece on the NSE, reflecting a 34.15% premium compared to its issue price.

IPO Proceeds 

The net proceeds from the Fresh Offer will be allocated as follows: investment in a new formulation plant for the subsidiary, Nova Agri Sciences Private Limited; funding Capital Expenditure to expand the existing formulation plant; meeting working capital needs for both the company and its subsidiary; and general corporate purposes.

Company profile

Nova AgriTech Limited manufactures products that help farmers grow crops better. The main focus is on soil health, plant nutrition, and crop protection. The products are manufactured using technology and are designed to be environmentally friendly and nutritious. The company collaborates with farmers to gain insight into their needs and develop customized solutions that meet their requirements.

The company manufactures, distributes, and markets a broad range of product categories, including soil health products, crop nutrition products, biostimulants, biopesticides, integrated pest management (IPM) products, new technologies, and crop protection products. The subsidiary Nova Agri Sciences Private Limited is currently responsible for producing crop protection products.

Subscription details: 

On January 25, 2024, the final day of the IPO window, the IPO witnessed an impressive response, with a subscription rate of 113.21 times. The public issue received remarkable interest, with the retail category being subscribed 80.20 times, while the QIB and NII categories reached a subscription rate of 81.13 and 233 times respectively.

The IPO price band was between Rs 39 and Rs 41, with a face value of Rs 2 per share and a lot size of 365 shares. The total size of the company’s IPO was Rs 143.81 crore, and the final share issue price was fixed at Rs 41 each.

Financial Performance:

Conclusion:

The key dilemma for investors lies in whether to hold onto their shares. Those who applied for the IPO solely intending to capitalise on listing gains have earned an impressive 36% return over its final issue price on the listing day itself. Investors who applied for the IPO purely for listing gains may consider closing their positions. Conversely, investors with a higher risk tolerance might opt to hold onto their shares for the medium to long term, as this strategy could potentially yield benefits over time.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.