Incorporated in 1996, Heranba Industries based at Vapi, Gujarat. The company manufacture Intermediates, Technicals and Formulations. The company is one of the leading domestic producers of synthetic pyrethroids like cypermethrin, alphacypermethrin, deltamethrin, permitherin, lambda cyhalothrin etc. Company's Pesticides range includes insecticides, herbicides, fungicides and public health products for pest control. The company exported products to more than 60 countries in Latin America, CIS, Middle East, Africa, Asia and South East Asia in FY 2020. As of November 15, 2020, Company's International Distribution Partners have successfully obtained 371 registrations of company's Technicals and Formulations in 41 countries across countries in Middle East, CIS, Asia, South East Asia and Africa. India has emerged as the largest pyrethroid manufacturer over the years. More than half of the global demand for Pyrethroids comes from China, after importing intermediates from India, which is used to produce pyrethroid. Yet China's adoption of the' Blue Sky' program to realize green GDP has led to the shutdown of several chemical plants. This, in turn, is expected to result in higher volumes of Pyrethroids being exported out of India. The company have an extensive distribution network in India supported by a skilled sales force. The company have more than 9400 dealers having access to 21 depots of Company across 16 states and 1 union territory in India supporting the distribution of company's products. The company participate in various international & domestic agrochemical exhibitions and industry conferences to market company's products. Company's sales & marketing teams travel extensively to maintain and strengthen existing relationships with customers and exploring new relationships with potential customers. The company also educate farmers regarding the benefits of using company's products by conducting farmer training camps, participating in village level programmes and exhibitions to establish a direct relationship with farmer communities all over India. As a part of company's expansion plans, company have in the year 2018 acquired on lease from GIDC around 55,000 sq. mtrs. of land at Sarigam, near Vapi, Gujarat out of which around 22,300 sq. mrts. is being used for Formulations facility, which will streamline company's production by some new reactors and establishing an automated facility for packaging the Formulations. Company's new R&D facility at Unit III Sarigam shall become operational from December, 2020. The remaining land shall be utilized at a later stage for manufacturing Intermediates, Technicals and for establishing other administrative facilities. The Sarigam Unit III also has a rooftop solar plant generating 2,66,590 units- kWh per annum for captive consumption. Company's manufacturing facilities have been/are being installed with well-balanced effluent treatment systems for solid, liquid and gaseous effluents and emission generated from Company's processes. As per financial performance, Heranba has posted total income/net profits of Rs. 750.41 cr. / Rs. 46.96 cr. (FY18), Rs. 1011.86 cr. / Rs. 75.56 cr. (FY19) and Rs 967.90 cr / Rs 97.38 cr (FY20). For upto H1 of FY21, company has posted profit of Rs 66.26 Cr on total revenue of Rs 619.21 Cr. So company has shown exceptional performance. Heranba has posted an average EPS of Rs. 20.95 and average RoNW of 31.22% for last three fiscals. Issue is priced at a P/BV of 6.42 as per NAV of 97.62 on 30.09.20. As per FY20 earnings, P/E is around 26. If we attribute latest annualised earnings of FY21 on fully diluted equity post issue, then asking price is at a P/E of around 19. Comparison between listed players is shown in above table. On BRLM's front, two BRLMs are associated with this IPO, and have handled around 1 IPO in last three fiscals. IPOs is opened above issue price on the day of listing. As of now, IPO is trading above issue price ( As on 12.02.2020 ) As per financials, results of Heranba Industries are good, RoNW is 31.22% for last three fiscals and issue looks fairly priced with respect to current earnings. Company belongs to Agrochemicals industry and it's growing at good rate, and expected to grow at good rate in future also. So we give SUBSCRIBE rating to this IPO for listing gains as well for long term also.
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