HARSHDEEP HORTICO LIMITED - IPO ANALYSIS

The ‘Harshdeep Hortico Limited’ officially issued its Prospectus on 18th January, 2024 mentioning the important details regarding its recent Initial Public Offering (hereinafter referred as IPO) which has started from January 25, 2024 and will close on 30th January, 2024. In this article we will look at some Important Financial Details of the company and the IPO, which investors need to consider before investing in a right company.

INITIAL PUBLIC OFFERNING | HARSHDEEP HORTICO LIMITED

The ‘Harshdeep Hortico Limited’ officially issued its Prospectus on 18^th January, 2024 mentioning the important details regarding its recent Initial Public Offering (hereinafter referred as IPO) which has started from January 25, 2024 and will close on 30^th January, 2024. In this article we will look at some Important Financial Details of the company and the IPO, which investors need to consider before investing in a right company.

ABOUT THE COMPANY

As per the details of the company present on its official website, the company was incorporated in the year 2022 with the name ‘Harshdeep Hortico Limited’ and subsequently, in the April 2023 the company decided to occupied the proprietorship of the promoter named as M/s Harshdeep Agro Products under the name of the company ‘Harshdeep Hortico Limited’.

BUSINESS OPERATIONS

‘Harshdeep Hortico Limited’ designs, develops, manufactures, and supplies a wide range of pots, planters, and related accessories. Many varieties of planters, such as plastic ones for indoor and outdoor use, illuminated planters, decorative planters, rotomolded planters, fiber-reinforced plastic (FRP) planters, and eco series planters, are among their product lines. They also provide accessories like water cans and garden hose pipes. In response to changing market demands, the firm has diversified its product line by adding Roto Moulded Outdoor Furniture to its inventory. Harshdeep Hortico Limited provides a wide range of products in several categories, such as Roto Moulded Series, Grower Series, Indoor Series, FRP Series, and Illuminated Planters, with an emphasis on innovation and client satisfaction.

INDUSTRY RESEARCH

Within the rapidly expanding industrial sector of India, Harshdeep Hortico Limited operates in a dynamic industry. It supports the nation's economic growth by using important industries including automotive, engineering, chemicals, pharmaceuticals, and consumer durables, with a concentration on horticulture-related goods. Gaining a competitive edge in the manufacturing industry requires embracing digital transformation. India's transition to a more automated and process-driven manufacturing sector has potential benefits for the firm in terms of increased production and efficiency. Furthermore, Harshdeep Hortico Limited is well-positioned for expansion and drawing in international investment because to India's strong manufacturing exports and government attempts to promote a favourable business climate. As the business takes advantage of these chances, it will be in a position to use its horticultural knowledge to support India's ambition to become global manufacturing market.

COMPETITION

In the Indian market, Harshdeep Hortico Limited competes against both organised and unorganised rivals from a variety of geographical areas. These rivals provide comparable goods, presenting difficulties with regard to cost, robustness, calibre, dependability of supply, and technical advancement. The firm constantly modernises its facilities and implements new technologies to improve product offers and optimise manufacturing costs in order to keep a competitive advantage. Nonetheless, competitors continue to face intense rivalry since they have stronger financial backing, longer operational histories, and more well-known brands. These rivals may reduce costs, provide a greater selection of products, or form business alliances, which would reduce their market share and profitability. More pressure is added when new rivals appear on the scene. Competitive success is also influenced by market dynamics, such as changes in pricing, variations in demand, and availability of raw materials. Revenues and profitability may decline in spite of marketing attempts to set oneself apart, if one is unable to effectively compete or adjust to changes in the business. In order to maintain growth in the face of changing market conditions, the firm has to be on the lookout for threats from the competition and take advantage of opportunities.

BOARD OF DIRECTOR AND PROMOTERS OF THE COMPANY

The company’s management includes the following members-

01.  Mr. Hitesh Chunilal Shah as Chaiman and Managing Director of the company.

02.  Mr. Harshit Hitesh Shah as Whole-Time Director of the company.

03.  Mrs. Dipti Hitesh Shah, Megh Hitesh Shah acting as Non-Executive Directors of the company.

04.  Mr. Arjun Manish Bhanushali, Mr. Dhruva Hemandra Parekh acting as Independent Directors of the company.

PROMOTER HOLDING

Together, the promoter and promoter group own 1,15,41,980 equity shares in the company, which is equivalent to 97.38% of Harshdeep Hortico Limited's preissue paid-up share capital. The shareholding of the company can be determined from the given chart.

KEY FINANCIAL DETAILS OF THE COMPANY

In the fiscal year 2022-23, the Company has achieved a noteworthy revenue from its operations of Rs. 4076.70 (in Lakhs), and generated a revenue of Rs. 3485.61 (in Lakhs) till 31^st March, 2022. While securing a profit of Rs. 222.86 (in Lakhs) for the year 2022-23. For the period ending 31 March, 2022 the company has earned a profit of Rs. 247.75 (in Lakhs).

To make a wise investment choice, we will delve into various financial ratios for a comprehensive assessment of the company's financial condition and performance.

DETAILS OF THE IPO

The present public offer of upto 42,42,000 Equity Shares out of which 2,16,000 Equity Shares are reserved for the Market Makers and net issue to the public available is of 40,26,000 Equity Shares. Investment portion reserved for QIB’s stands at 20,10,000 Equity Shares. The issue price of the share ranges at Rs. 42 – Rs. 45.

Some Important details with respect to the Application Size for Qualified Institutional Bidder and Non-Institutional Investor has been Summarised in the following table:

OBJECTIVES OF THE IPO

The objective of the issue of the IPO is for (i) Repayment and/or pre-payment, in full or part, of certain borrowings availed by our Company; (ii) Meeting the working capital expenses; (iii) meeting the general corporate expenses of the company.

RISKS INVOLVED

Numerous hazards might have an effect on Harshdeep Hortico Limited's business operations and financial stability. First off, activities in particular geographic areas account for a considerable amount of the company's sales, with Maharashtra being a major revenue generator. Revenue and outcomes might be negatively impacted by any unfavourable events that have an influence on operations in these areas.

Second, the company's raw material procurement is dependent on a small number of important suppliers in constrained geographic areas. The operations and financial status of businesses might be negatively impacted by any disturbance in the supply chain or variations in the cost of raw materials. Furthermore, Harshdeep Hortico Limited's little history of operation as a public limited company makes it difficult to predict future possibilities and development potential. Even while the promoter's prior business expertise offers some perspective, success going forward could not match historical growth rates.

Furthermore, the business works in a pricing-sensitive sector where product prices have an impact on customer decisions to buy. Offering pricing that aren't competitive may have a detrimental impact on business results. Moreover, regulatory compliance is necessary for the running of businesses. If licences, registrations, and permissions are not obtained or renewed on time, business activities may be disrupted and financial circumstances may be negatively impacted. Permit delays or non-renewals might seriously hinder the business's ability to continue operating.

ANALYSIS AND RECOMMENDATION

The Initial Public Offering (IPO) of Harshdeep Hortico Limited, a producer and seller of planters, pots, and related accessories, has been announced. Up to 42,42,000 Equity Shares, with a price range of Rs. 42 to Rs. 45 per share, are available in the company's IPO. The goal of the IPO is to raise cash to support the company's development and expansion ambitions, with a particular emphasis on working capital, debt repayment, and general corporate reasons. In the fiscal year 2022–2023 Harshdeep Hortico Limited had revenue of Rs. 4076.70 lakhs and a profit of Rs. 222.86 lakhs, indicating steady financial performance. The firm offers a potential investment opportunity, bolstered by a diversified product range and a strong footing in both domestic and foreign markets.

IMPORTANT DATES

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