Introduction to Dhanlaxmi Crop Science IPO

Dhanlaxmi Crop Science Limited is poised to launch its IPO to raise ₹23.80 Crores, offering 43.28 lakh shares at a price band of ₹52 to ₹55 per equity share. The company aims to meet the growing demand for agricultural seeds tailored to India’s diverse agro-climatic conditions, offering products suited to different market needs. This article will cover all the essential details about the upcoming IPO, subscription status, and its potential for investors.

Company Overview and Background

Dhanlaxmi Crop Science was founded with the intention of addressing the specific agricultural needs of Indian farmers. By focusing on seed production and crop management solutions, the company has steadily built a reputation for providing high-quality agricultural products, supported by extensive research and development at its state-of-the-art facilities in Himatnagar, Gujarat.

The company specializes in providing agricultural seeds that are suitable for various agro-climatic regions in India. Dhanlaxmi Crop Science’s success lies in its ability to match the demands of the local market and the consumer, continuously improving its products through rigorous research. With over 20 years of industry experience, Mr. Kamlesh Patel, the Managing Director and Promoter of the company, has led the organization to consistent growth.

Dhanlaxmi Crop Science IPO Details

• Issue Type: Book Built Issue
• Total Issue Size: ₹23.80 Crores
• Shares Offered: 43.28 Lakh Shares (Fresh Issue)
• Price Band: ₹52 to ₹55 per equity share
• Market Capitalization at Upper Price Band: ₹89.80 Crores
• Subscription Period: December 9, 2024 – December 11, 2024
• Listing Date: December 16, 2024 (Tentative)

Lot Size: Investors need to bid in multiples of 2,000 shares, which means the minimum investment for retail investors is ₹1,10,000. High-Net-Worth Individuals (HNIs) need to invest a minimum of ₹2,20,000 (2 lots).

Subscription and Allotment Process

The subscription for the Dhanlaxmi Crop Science IPO will be open from December 9 to December 11, 2024. The allotment of shares is expected to be finalized on December 12, 2024. Investors can check the allotment status by visiting the registrar's website, entering their application number, PAN, or DP Client ID.

As of December 11, 2024, the IPO has been subscribed 166.44 times, indicating strong investor interest. The Grey Market Premium (GMP) for the IPO shows a positive trend, with a projected listing price of ₹77, suggesting a potential gain of 39.91% over the issue price of ₹55.

Grey Market Premium (GMP) Trends

The Grey Market Premium of Dhanlaxmi Crop Science IPO has been steadily increasing as the subscription period draws to a close. The trends are as follows:

• December 10, 2024: GMP at ₹22, indicating a 39.91% potential gain.
• December 9, 2024: GMP at ₹16, reflecting a 29.55% potential gain.
• December 6, 2024: GMP at ₹13, showing a 23.64% potential gain.
• December 5, 2024: GMP at ₹10, signaling a 18.18% potential gain.

Financial Performance of Dhanlaxmi Crop Science

Dhanlaxmi Crop Science has shown consistent growth in its revenue and profitability. For the fiscal years 2022-2024, the company reported the following financials:

• Revenue from Operations:

  • FY 2024: ₹6,375.08 Lakhs
  • FY 2023: ₹4,664.17 Lakhs
  • FY 2022: ₹3,543.08 Lakhs

• EBITDA:

  • FY 2024: ₹689.01 Lakhs
  • FY 2023: ₹452.20 Lakhs
  • FY 2022: ₹155.34 Lakhs

• Profit After Tax (PAT):

  • FY 2024: ₹465.36 Lakhs
  • FY 2023: ₹299.55 Lakhs
  • FY 2022: ₹58.28 Lakhs

These figures highlight the company’s strong growth trajectory, with a robust Return on Capital Employed (ROCE) of 39.07% and a Return on Equity (RoE) of 33.82% for FY 2024. This reflects the company’s efficient use of capital and its ability to generate significant profits from its operations.

Valuation and IPO Pricing

The price-to-earnings (P/E) ratio for Dhanlaxmi Crop Science IPO is calculated as follows:

• Pre-issue EPS: ₹3.88
• Post-issue EPS: ₹2.85
• Pre-issue P/E ratio: 14.18x
• Post-issue P/E ratio: 19.30x
• Industry P/E ratio: 21x

The company’s IPO price is reasonably priced compared to its industry peers. With a P/E ratio lower than the industry average, the IPO appears fairly priced for investors looking for a moderate entry point into the agricultural sector.

Use of IPO Proceeds

The funds raised from the IPO will be utilized for the following purposes:

1. Working Capital Requirements – ₹2,005.77 Lakhs
2. To Meet Issue Expenses – Funds will be allocated to cover the costs associated with the IPO process.
3. General Corporate Purposes – Any remaining funds will be used for the company’s general corporate activities and expansion plans.

Investment Recommendation

Given the company’s strong financial performance, robust growth prospects, and fair pricing, we recommend applying for the Dhanlaxmi Crop Science IPO. With a strong Grey Market Premium (GMP) and good potential for listing gains, this IPO presents an attractive opportunity for investors seeking to capitalize on the growth of the agricultural sector in India.

Conclusion

Dhanlaxmi Crop Science IPO is shaping up to be an exciting investment opportunity for retail and institutional investors alike. With a well-priced issue, solid financials, and a promising market outlook, the company is well-positioned to grow and deliver value to its shareholders.

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