Dharmaj Crop Guard Limited IPO

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i. Dharmaj Crop Guard is an agrochemical company engaged in the business of manufacturing, distributing, and marketing of a wide range of agro chemical formulations such as insecticides, fungicides, herbicides, plant growth regulator, micro fertilizers and antibiotic to the B2C and B2B customers.

ii. They are also engage in the marketing and distribution of agrochemical products under brands in-licensed by the company, owned by the company and through generic brands, to Indian farmers through its distribution network. Dharmaj Crop Guard provide crop protection solutions to the farmer to assist them to maximize productivity and profitability.

iii. They export their products to more than 25 countries in Latin America, East African Countries, Middle East and Far East Asia. They sell their agrochemical products in granules, powder and liquid forms to its customers. Additionally, they manufacture and sell general insect and pest control chemicals for Public Health and Animal Health protection.

iv. Dharmaj Crop Guard has obtained 464 registrations for agrochemical formulations from the CIB&RC, out of which 269 agrochemical formulations are for sale in India as well as for export and 195 agrochemical formulations are exclusively for exports. Additionally, they have also applied for registrations of 18 agrochemical formulations and 17 agrochemical technicals from the CIB&RC, which are pending at various stages.

v. The company has 157 trademark registrations including its branded products. Their formulations are sold as branded products to customers. Dharmaj Crop has over 118 branded formulations that are sold to farmers. They sell bulk products to its institutional customers domestically and in the international markets. Further, as of September 30, 2022, the company had more than 154 institutional products that it sold to more than 600 customers based in India and in the international markets. As of September 30, 2022, the company exported its products to more than 66 customers across 25 countries.

vi. Competitive Strengths

i. Diversified portfolio of our products and consistent focus on quality and innovation

ii. Strong R&D capabilities with focus on innovation and sustainability.

iii. Established distribution network with strong branded products and stable relationship with our institutional customers

 

Objects of the Dharmaj Crop Guard Limited IPO:

The net proceeds of the Fresh Issue are proposed to be utilised in the following manner: 1. Funding capital expenditure towards setting up of a manufacturing facility at Saykha, Bharuch, Gujarat. 2. Funding incremental working capital requirements of the Company. 3. Repayment and/or pre-payment, in full and/or part, of certain borrowings of the Company. 4. General corporate purposes.

Dharmaj Crop Guard Limited IPO Details:

Open Date: Nov 28 2022
Close Date: Nov 30 2022
Total Shares: 10,596,924
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue
Issue Size: 216 Cr.
Lot Size: 60 Shares
Issue Price: ₹ 216-237 Per Equity Share
Listing At: NSE,BSE
Listing Date: Dec 08 2022

Promoters And Management:

i. Rameshbhai Ravajibhai Talavia, the Chairman and Managing Director of the Company. He holds a bachelor’s degree in Science (Agriculture) from the Gujarat Agricultural University. Previously, he was working with E.I.D. Parry (India) Limited as Senior Marketing Officer and Crop Life Science Limited as Director. He has over 28 years of experience in various aspects of agro chemical industry. ii. Jamankumar Hansarajbhai Talavia, is a Whole-time Director of the Company. He holds a bachelor’s degree in Science (Agriculture) from the Gujarat Agricultural University. Previously, he was working with E.I.D. Parry (India) Limited, Coromandel Fertilizers Limited and Crop Life Science Limited. He has been associated with the Company since its incorporation. He heads the manufacturing and purchase processes at the manufacturing facility. He was awarded the Best Marketing Representative by Parrys, Certificate of Merit at Coromandel – Godavari Meet 2007 and Diamond Market Representative Award by EID Parry-Coromandel Fertilizers. He has over 22 years of experience in various aspects of agro chemical industry. iii. Jagdishbhai Ravjibhai Savaliya, the Whole-time Director of the Company. He holds a bachelor’s degree in Science from the Saurashtra University. Previously, he was working with Sunrise Pharmaceuticals, Crop Life Science Limited, Sabero Organics Gujarat Limited and Cratus Life Care. He heads the research and development and production process at the manufacturing facility. He has over 21 years of experience in various aspects of agro chemical industry.

Financials of Dharmaj Crop Guard Limited IPO:

Particulars (In Cr) 2022 2021 2020
Revenue From Operations 394 302 198
Cost Of Material Consumed 321 241 157
Change In Inventories -13 -8 -6
Manufacturing and Operating Cost 6 6 4
Employees benefit Expense 14 12 8
Other Expenses 22 20 17
EBITDA 44 31 18
OPM 11.17% 10.26% 9.09%
Other Income 2 1 1
Depreciation 5 3 2
Finance Cost 3 1 2
PBT 38 28 15
Tax 10 7 4
PAT 28 21 11
No. Of Shares 3.37 3.37 3.37
EPS 8.31 6.23 3.26

Comparison With Peers:

Name of the Company Revenue (in Cr) Profit (In Cr) EPS P/E CMP MCap (Cr)
Dharmaj Crop Guard limited 394 28 8.31 28.5 237 800
Rallis India 2,604 164 8.45 28.4 239 4,648
India Pesticides 716 158 13.75 18.9 251 2,889
Punjab Chemical and Crop Protection 933 83 68.06 18.2 1,176 1,442
Bharat Rasayan 1,301 177 426.27 23.9 10,150 4,218
Astec Lifesciences 677 90 45.85 42.7 2,126 4,168
Heranba Industries 1,450 189 47.25 11.7 519 2,077

Recommendation on Dharmaj Crop Guard Limited IPO:

Review and Recommendation of DHARMAJ CROP GUARD by InvestorZone team is 6/10

1. Dharmaj Crop is an agrochemical company engaged in the business of manufacturing, distributing, and marketing of a wide range of agro chemical formulations such as insecticides, fungicides, herbicides, plant growth regulator, micro fertilizers and antibiotic to the B2C and B2B customers. 2. As of September 30, 2022, they exported products to more than 66 customers across 25 countries. 3. Company has also planned backward integration for that they have acquired 33,489.73 sq. mtrs of land in Gujarat to manufacture Agrochemical Technicals and its intermediates which will be used for internal consumption as well as for sales in domestic and international market. 4. Company’s products are sold in 17 states through network comprising over 4,362 dealers having access to 16 stock depots in India supporting the distribution of the branded products. 5. Revenue has increased from 200 Crores in Fy20 to ~400 Crores in Fy22. 6. PAT has increased from 10 Crores in Fy20 to 28 Crores in Fy22. | 7. P/E is 28x for the Issue price which looks fully priced in as compared to peers like Bharat Rasayan (23x P/E), Rallis India (28x P/E), India Pesticides (18x P/E) etc. 

Lead Manager of Dharmaj Crop Guard Limited IPO:

  1. Elara Capital (India) Private Limited
  2. Monarch Networth Capital Limited

Registrar of Dharmaj Crop Guard Limited IPO:

  1. Link Intime India Private Limited

Company Address:

Dharmaj Crop Guard Limited Plot No. 408 to 411, Kerala GIDC Estate, Off NH-8, At: Kerala, Taluka Bavla, Ahmedabad – 382220 Phone: +91-79-29603735 Email: Websitehttp://www.dharmajcrop.com/

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