Telangana-based agri-input manufacturer, Nova Agritech files IPO papers with SEBI

Telangana-based agri-input manufacturer, Nova Agritech files IPO papers with SEBI

Telangana-based agricultural input manufacturer, Nova Agritech has filed its draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (SEBI) to raise funds through an Initial Public Offering (IPO). The shares of the company are proposed to be listed on NSE and BSE. The issue with a face value of Rs 2 per equity share consists of a fresh issue of equity shares worth up to Rs 140 crore and an offer-for-sale (OFS) of up to 77,58,620 equity shares by Nutalapati Venkatasubbarao. The company offers tech-based farmer-driven solutions for soil health management and crop nutrition as well as its own crop protection products.

The company and the selling shareholders in consultation with the BRLMs may consider a pre-IPO placement of equity shares of upto Rs 25 crores. If such placement is completed, the issue size will be reduced accordingly.

The Nova Agritech IPO is being made through the Book Building Process, wherein not more than 50 per cent of the offer shall be available for allocation to Qualified Institutional Buyers, not less than 15 per cent of the offer shall be available for allocation to Non-Institutional Investors and not less than 35 per cent of the offer shall be available for allocation to Retail Individual Investors.

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Out of the proceeds from the fresh issuance, an amount of Rs. 14.20 crore will be utilised for Investment in its subsidiary, Nova Agri Sciences for setting up a new formulation plant, Rs 10.49 crore for funding Capital Expenditure by the company, towards the expansion of its existing formulation plant, Rs 26.69 crore for funding of working capital requirement, Rs 56.74 for investment in its subsidiary, Nova Agri Sciences for funding working capital requirements and general corporate purposes.

The company was founded in 2007 by Sambasivarao Yeluri and Kalyana Chakravarthy with the objective to become a one-stop solution provider for the farming community. It’s currently being led and promoted by technocrat Kiran Kumar Atukuri who has over two decades of experience with agrochemicals, seeds and fertiliser companies. Nova Agritech manufactures, distributes and markets a wide range of product categories consisting of soil health management products; crop nutrition products; bio-stimulant products; bio-pesticide products; Integrated Pest Management (IPM) products; and crop protection products through an active network of over 6,200 dealerships spread across 16 states across the country.

Focused on R&D, it has leased a 66.11-acre land in Valaparla village in Andhra Pradesh to test the effectiveness of its products on various crops.

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It has contracts in place to supply, market, and distribution with certain third parties in Bangladesh, Sri Lanka, and Vietnam, and is presently awaiting the appropriate approval to open for business in these countries.

As on Jan 31, 2023, Nova Agritech has a total of 629 product registrations, comprising of seven registrations in the soil health management category, 168 registrations in the crop nutrition category, four registrations in the bio-pesticides category and 450 registrations in the crop protection category by its subsidiary, additionally, along with its group companies, it has applied for 79 new registrations.

Nova Agritech’s revenue from operations increased by 15.56 per cent to Rs 185.57 crore for the financial year 2021-22 from Rs 160.58 crore for the financial year 2020-21, primarily on account of an increase in business volumes on the back of technical import registrations, foraying into new states like Rajasthan and Odisha and consolidation of business in existing states namely, Karnataka, Maharashtra and Madhya Pradesh whereas profit after tax increased by 117.30 per cent to Rs 13.69 crore for the financial year 2021-22 from Rs 6.30 crore for the financial year 2020-21.

Keynote Financial Services and Bajaj Capital are the book-running lead managers to the issue.

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