Dharmaj Crop Guard IPO Review

Dharmaj Crop Guard IPO intends to raise Rs. 251 crores which consist of fresh issue of equity shares worth up to Rs 216 crores with a face value of Rs 10 each and an offer-for-sale of up to 14.83 lakh equity shares by existing shareholders. Dharmaj Crop Guard Ltd., an agrochemical company based out of Ahmedabad’s has fixed the IPO price band at Rs 216-237 per share.

Issue opens       28th November, 2022              
Issue Closes30th November, 2022             
Issue Details              Fresh Issue of Equity Shares aggregating upto ₹ 216 Cr  
 +Offer for Sale of 1,483,000 Equity Shares        
Issue ( No. of shares)11,483,000 – 10,596,924
Face Value              ₹ 10/- Per Share              
Issue Size               ₹ 248 – 251Cr             
Price Band              ₹ 216 – 237             
Bid Lot              60 Shares 
QIB              50% of the net offer   
NIB              15% of the net offer
Retail              35%  (Approx 37 Lac – 87 Cr)        
Applications for 1x Retail0.62 Lacs

About Dharmaj Crop Guard

  • The company’s manufacturing facility is located in Ahmedabad.
  • Dharmaj Crop Guard Limited is engaged in manufacturing, distributing, and marketing a wide range of agrochemicals such as insecticides, fungicides, herbicides,
  • plant growth regulators, micro fertilizers, and antibiotics
  • It engages both with B2C and B2B customers.
  • It markets and distributes its own branded agrochemical products, the ones in-licensed by them and other generic brands to Indian farmers. For its domestic branded business.
  • It has a well-established distribution network that comprises over 4,362 dealers having access to 16 stock depots and a presence in 17 states.
  • The company exports to more than 25 countries in Latin America, East African countries, the Middle East, and Far East Asia.
  • The company’s manufacturing facility in Gujarat, has an aggregate installed capacity of 25,500 MT for its agrochemical formulations. It lso has an R&D Centre.

Anchor Book: Dharmaj Crop Guard IPO

  • Dharmaj Crop Guard allocated shares to 3 anchor investors which resulted in an overall allocation of Rs.75 crore. The investors, Elara India Opportunities Fund, Rajasthan Global Securities and Resonance Opportunities Fund, invested in the company through the anchor book. Elara India Opportunities Fund bought shares worth Rs 34.94 crore, Rajasthan Global Securities purchased Rs 25 crore shares, and Resonance Opportunities Fund bought Rs 15 crore worth of shares.

Dharmaj Crop Guard IPO : Financials

Particulars / (₹ Cr)4m FY23FY22FY21Fy20
Revenue from Operations 220.94394.21302.41198.22
Revenue Growth (%) – 30.36%52.56%– 
EBITDA  26.8546.1932.0418.58
EBITDA Margin (%) 12.15%11.72%10.59%9.37%
Net Profit 18.3628.6920.9610.76
Net Profit Margin (%) 8.31%7.28%6.93%5.43%
EPS – Basic & Diluted (₹)  7.4411.628.495.2
Equity Share Capital 24.6824.6816.4616.46
Net worth 101.1782.8256.1435.22
RoNW (%) 18.15%34.64%37.33%30.55%
Net Asset Value (₹) 40.9933.5522.7517.01
ROCE (%) 15.96%32.87%34.50%28.76%
ROE(%) 18.15%34.64%37.33%30.55%
Debt Equity Ratio 1.431.441.51.22
Post Issue share Cap33.8
FV in Rs. 10
IPO price237
EPS post IPO FY228.49
PE 27.9
Market Cap Rs. Cr. 801
Market Cap/Sales2.03

Consolidated figures for q1FY23 are not available.

Salient Points: Dharmaj Crop Guard IPO

  • The company has wide range of product portfolio catering to both domestic and international market and serving to both retail and institutional customers.
  • The IPO proceeds are intended to be used for :
    • Funding capital expenditure towards setting up of a manufacturing facility at Saykha, Bharuch, Gujarat
    • Funding incremental working capital requirements of our Company;
    • Repayment and/or pre-payment, in full and/or part, of certain borrowings of our Company; and
    • General corporate purposes
  • Dharmaj Crop Guard has obtained 464 registrations for agrochemical formulations from the CIB&RC (Central Insecticides Board and Registration Committee).
  • Out of these 269 agrochemical formulations are for sale in India anas well as export while 195 agrochemical formulations are exclusively meant for exports.


  • Dependent on third party transportation and logistics providers.
  • Domestic agro-chemicals industry remains vulnerable to ban on products by the government and erratic monsoons.
  • Intense price and product competition among local players and multinational corporations.
  • Exposed to foreign currency exchange risks

Peer Comparison

 CompanyFV (₹ )CMP  (₹) Revenue (FY22  ₹ million)P/ERoNW %EBITDA %ROE
Rallis India123226,03927.459.6811.589.68
India Pesticides12557,16118.5324.7631.6924.76
Punjab Chemical & Crop1011929,33517.5136.9915.0636.99
Bharat Rasayan101016413,0122422.8520.422.85
Astec Life1021076,76645.9222.6624.3222.66

Dharmaj Crop Guard IPO: Assessment

  • Pesticides and other agrochemicals market in India grew at a CAGR of 4.5% from ₹368 billion in 2013-14 to ₹439 billion in 2017-18.
  • It is estimated to grow at a CAGR of 7.5%-8.5% by 2026-27.
  • Growing population, demand for Food, Government support for agriculture, good domsetic and international demand bode well for agrochemicals sector.
  • Dharmaj Crop Guard is an agro-chemicals company with both B2C & B2B customers. B2B is its major revenue source.
  • It exports its products to more than 20 countries in Latin America, East Africa, Middle East & Far East Asia.
  • Major customers include names like Atul Limited, Heranba Industries Limited, Innovative Agritech, Meghmani Industries, Bharat Rasayan, Oasis, United Insecticides, Sadik Agrochemical.
  • Dharmaj Crop Guard is enhancing the manufacturing capabilities through backward integration and expand the product portfolio and setting up a new plant;
  • Dharmaj Crop Guard is currently operating with an installed capacity of 25,500 mt of agro-chemical formulations. It plans to increase this through backward integration and is setting up a manufacturing facility for agrochemical technicals and its intermediates, which will be used for internal consumption as well as for sales in domestic as well as international market.
  • Thus the company is targeting new customers, expanding existing customer business and aims to increase the market share both in domestic and international markets.
  • The company is expanding Public Health and Animal Health product portfolio.
  • It is strengthening up the business through effective branding, promotional and digital activities.
  • on post-issue equity, EPS works out to Rs 8.5. PE works out to 27.9x
  • Dharmaj Crop Guard is a small company and valuations being demanded are at par with peers.
  • Iam likely to apply for Dharmaj Crop Guard IPO on Day 3.

Dharmaj Crop Guard IPO: Apply or Not (My view Only)

Risk : Low to Moderate
Expected Reward : Moderate to low profit looks possible. small loss on listing cannot be ruled out.
Listing Gains : Possible. Current GMP ~ Rs. 50
Hold for Medium Term: good tailwinds for sector
Subscription : Expected to be moderate
Above are my views only. Please do your own diligence.

Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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