Balaji Phosphates Limited has launched its Initial Public Offering (IPO) with a subscription period open from February 28, 2025, to March 4, 2025. The company specializes in NPK Granulated and Mixed Fertilizers, Zinc Sulfate (21%), and Phosphate Fertilizers, including Single Super Phosphate (SSP) in both powder and granulated forms. The company's operations adhere to the Fertilizer Control Order of India standards, with a manufacturing facility located in Dewas, Madhya Pradesh. The installed capacity for SSP production is 120,000 MTPA, while Zinc Sulfate production stands at 3,300 MTPA, making SSP the primary revenue driver.

Balaji Phosphates IPO Details

The Balaji Phosphates IPO is structured as a Book Built Issue amounting to ₹ 50.11 crores, comprising:

• Fresh Issue: 59.40 lakh shares worth ₹ 41.58 crores

• Offer for Sale (OFS): 12.18 lakh shares worth ₹ 8.53 crores

The issue price band is set at ₹ 66 to ₹ 70 per share, with a lot size of 2,000 shares. The minimum investment for retail investors is ₹ 1,40,000, while High-Net-Worth Individuals (HNIs) must invest at least 2 lots (4,000 shares) amounting to ₹ 2,80,000. The IPO allotment is expected to be finalized on March 5, 2025, and shares will be listed on NSE SME on March 7, 2025.

Financial Overview & Valuation

Balaji Phosphates Limited has exhibited steady revenue growth, with financial data reflecting positive trends:

• Revenue from Operations:

  • FY22: ₹ 12,411.72 lakh

  • FY23: ₹ 14,464.12 lakh

  • FY24 (Projected): ₹ 15,168.02 lakh

  • August 31, 2024 (Half-year): ₹ 5,484.66 lakh

• EBITDA:

  • FY22: ₹ 792.35 lakh

  • FY23: ₹ 1,167.20 lakh

  • FY24 (Projected): ₹ 1,209.70 lakh

  • August 31, 2024: ₹ 572.55 lakh

• Profit After Tax (PAT):

  • FY22: ₹ 319.08 lakh

  • FY23: ₹ 608.76 lakh

  • FY24 (Projected): ₹ 604.05 lakh

  • August 31, 2024: ₹ 414.65 lakh

The company’s valuation metrics indicate a pre-issue EPS of ₹ 3.39 and a post-issue EPS of ₹ 2.54. The pre-issue P/E ratio is 20.65x, and the post-issue P/E ratio is 27.56x, which is higher than the industry average P/E ratio of 15x. The Return on Capital Employed (ROCE) is 16.70%, and Return on Equity (ROE) is 18.89%, indicating healthy profitability.

Balaji Phosphates IPO GMP and Subscription Status

The Grey Market Premium (GMP) for Balaji Phosphates IPO is currently ₹ 0, indicating no immediate listing gains. GMP depends on demand-supply dynamics, and investors are advised to rely on fundamental analysis rather than GMP trends.

The IPO subscription status as of 07:00 PM on February 28, 2025, shows a 0.19 times subscription, suggesting lukewarm investor response on Day 1.

Anchor Investors and Market Maker

Balaji Phosphates has raised ₹ 8.57 crores from Anchor Investors at ₹ 70 per share, with 12,24,000 shares allotted.

• Book Running Lead Manager: Arihant Capital Markets Limited

• Registrar: Skyline Financial Services Private Limited

• Market Maker: Nnm Securities Private Limited

Objectives of the IPO

Balaji Phosphates aims to utilize net proceeds from the IPO for:

1. Capital Expenditure - ₹ 1,287.90 lakhs

2. Funding Working Capital Requirements - ₹ 1,900.00 lakhs

3. General Corporate Purposes

Investment Outlook & Recommendation

Despite steady financial growth, valuation concerns and a zero GMP indicate limited short-term gains. The IPO is fully priced, with a P/E ratio above industry average.

Final Verdict: Investors are advised to AVOID Balaji Phosphates IPO for short-term listing gains or long-term investment.

The Upcoming IPOs in this week and coming weeks are  NAPS Global.

The Current active IPO are Balaji Phosphates, Shreenath Paper.

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