Nova Agritech debut: Should Buy, Sell or Hold the shares post listing?
Nova Agritech’s share price made a stellar debut on the bourses today, listing at ₹55, an over 34 percent premium to the issue price of ₹41 on BSE. Meanwhile, on BSE, Nova Agritech’s share price was listed at ₹56 apiece, up 36.6 percent from the issue price. It further rose to its intra-day high of ₹58.79, up 43.4 percent versus the IPO price on BSE.
Shivani Nyati, Head of Wealth at Swastika Investmart said that Nova Agritech’s IPO debut exceeded even expectations, soaring a remarkable 34.15 percent above its issue price of ₹41 to list at ₹55.
“Nova Agritech had witnessed a significant oversubscription of 109.37 times during the offer period, hinting at robust investor confidence in the company’s prospects. This stellar listing was fueled by multiple positive factors, including the company’s strong market position as a one-stop solution provider for crop and soil health through its diverse branded product portfolio. Its well-established geographical presence and effective marketing strategy further enhance its growth potential. Additionally, Nova Agritech’s consistent financial performance, impressive growth over the past three years, and ambitious expansion plans further bolstered investor sentiment,” Nyati advised.
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She added that for existing investors, holding their shares and closely monitoring the company’s performance and market conditions remains the recommended approach.
Experts had predicted a strong listing for the IPO.
Giving a subscribe tag to the book build issue, BP Equities said, “Turning to valuations, the PE ratio stands at 12.3x based on the annualized diluted H1FY24 EPS which appears relatively low compared to peers in the industry. The valuation outlook hinges on Nova AgriTech’s ability to maintain its current sales growth rate, preserve net margins, and gradually improve them. Based on the positives discussed, we give the issue a “SUBSCRIBE” rating.”
Dhruv Mudaraddi, Research Analyst, Stoxbox also said that Nova Agritech is strategically positioned to capitalise on the substantial growth potential within the Indian agricultural sector, which is projected to grow at a compound annual growth rate (CAGR) of 5.1 percent over the next five years. The company’s expansion plans, funded by IPO proceeds, align with the industry’s upward trajectory, emphasising the potential for future success.
Nova Agritech IPO Details
The initial public offering (IPO) of Nova Agritech was open for subscription between January 23 and January 25 at a price band in the range of ₹39 to ₹41.
The IPO witnessed a robust subscription in 3 days of bidding. It was subscribed 109.37 times by day 3. Nova IPO’s retail investor’s portion was subscribed 77.12 times, the Non-Institutional Investors (NII) portion was subscribed 224.08 times, and the Qualified Institutional Buyers (QIB) portion was booked 79.31 times.
The ₹143.81 crore Nova IPO comprises a fresh issue of ₹112 crore, and an offer-for-sale (OFS) of 77.58 lakh equity shares of ₹2 aggregating up to ₹31.81 crore by the selling shareholder, Nutalapati Venkatasubbarao.
The net proceeds of the issue will be used for the investment in the subsidiary Nova Agri Sciences Private Limited for the construction of a new formula factory, financing the company’s capital expenditures for the expansion of an existing formula plant, financing the company’s working capital needs and for general business purposes.
As a manufacturer of agricultural inputs, Nova Agritech specialises in crop protection, crop nutrition, and soil health management. Our tech-driven farmer-driven solution approach allows us to provide products that are both nutritionally balanced and environmentally sustainable, with a focus on research and development.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decision.
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Published: 31 Jan 2024, 10:55 AM IST
