INITIAL PUBLIC OFFERNING | NOVA AGRITECH LIMITED

The ‘Nova Agritech Limited’ officially issued its Prospectus on 12th January, 2024 mentioning the important details regarding its recent Initial Public Offering (hereinafter referred as IPO) which will start from January 22, 2024 and closes on 24th 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 | NOVA AGRITECH LIMITED

The ‘Nova Agritech Limited’ officially issued its Prospectus on 12^th January, 2024 mentioning the important details regarding its recent Initial Public Offering (hereinafter referred as IPO) which will start from January 22, 2024 and closes on 24^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 2007 as a private company with the name ‘Nova Agritech Private Limited’ and subsequently, in the September 2018 the company decided to go public and changed its name to ‘Nova Agritech Limited’.

BUSINESS OPERATIONS

The ‘Nova Agritech Limited’ works as an agri-input manufacturer. The company is a key player in the agricultural sector, offering a range of soil health management, crop nutrition and crop protection products. The company offers a diverse range of product categories which are manufactured, distributed, and marketed by Nova Agritech Limited. Its product range includes Soild Helath Management Products which works as a solution for soil health, including organic fertilizers, bio- ferilizers and soil conditioners. Crop nutrition products, such as micronutrient fertilisers, direct nitrogen and potash fertilisers, and 100% water-soluble NPK fertilisers, are the specialty of Nova Agritech. These products optimise plant nutrition for increased yields. Their Bio Stimulant Products are designed to ensure the general health of crops by stimulating plant growth and vitality. The firm provides Integrated Pest Management (IPM) solutions and produces ecologically safe Bio Pesticide Products. Nova Agritech is dedicated to innovation and makes investments in New Technologies to improve farming methods. Even though its subsidiary Nova Agri Sciences Private Limited presently produces crop protection products, these products are still essential for protecting crops from pests and diseases.

BOARD OF DIRECTOR AND PROMOTERS OF THE COMPANY

The company’s management includes the following members-

01.  Mr. Adabala Seshagiri Rao as Chairperson and Independent Director of the company.

02.  Mrs. Malathi Sacting as Promoter and Executive Director of the company.

03.  Mr. Kiran Kumar Atukuri acting as Promoter and Managing Director of the company.

04.  Mr. Nadella Basanth Kumar, Mr. Sreekanth Yenigalla acting as Whole-time Directors of the company.

05.  Mr. Adapa Kiran Kumar, Mrs. Kandula Swapna, Mr. Ramesh Babu Nemani acting as an Independent Directors of the company.

KEY FINANCIAL DETAILS OF THE COMPANY

In the fiscal year 2022-23, the Company has achieved a noteworthy revenue from its operations of Rs. 21,055.54 (in Lakhs), and generated a revenue of Rs. 10,321.60 (in Lakhs) till 30^th September, 2023. While securing a profit of Rs. 2,048.95 (in Lakhs) for the year 2022-23. For the period ending 31 March, 2022 the company has earned a profit of Rs. 1,368.98 (in Lakhs). And till 30 September, 2023 the company has earned a profit of Rs. 1,038.22 (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 35,075,693 Equity Shares includes a Fresh issue of 27,317,073 Equity shares and an offer for sale by the Promoter Selling Shareholders of 7,758,620 Equity shares are there to be subscribed at the price of ₹ 39 - ₹ 41.

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) Investment in its subsidiary, Nova Agri Sciences Private Limited for setting-up a new formulation plant; (ii) Funding Capital Expenditure by their Company, towards expansion of existing formulation plant; (iii) Meeting the working capital expenses; (iv) Investment in our subsidiary, Nova Agri Sciences Private Limited, for funding working capital requirements. (v) meeting the general corporate expenses of the company.

RISKS INVOLVED

Numerous dangers might hinder Nova Agritech's expansion and day-to-day operations. The creation and upkeep of its brands, which are essential to its success, may present difficulties. There are risks associated with using Net Proceeds for plant expansion and subsidiary investments, including delays, cost overruns, and uncertainty, which can affect financial performance, business growth, and outcomes.

Government rules control the different licences and permissions that the corporation must get. Obtaining licences, registrations, and regulatory permissions takes money and effort, and delays might make operations more difficult. Dealer payment defaults or delays are dangerous because they affect financial and commercial operations.

The uninterrupted dealer supply chain is essential to corporate operations. It is essential to keep up periodic payment cycles with dealers in order to collect past-due receivables as soon as possible, avoid negative consequences on financial operations, and Profitability.

The necessity of having access to finance at reasonable prices is underscored by the significant working capital requirements and probable future capital requirements. For the business to remain operational, it must be able to get extra funding and capital as needed. Credit ratings are important when applying for loans, and not getting the money you need might mean reducing operations.

ANALYSIS AND RECOMMENDATION

Nova Agritech has reported significant sales and profit statistics, exhibiting remarkable financial success. Important financial parameters shed light on the company's financial stability and operational effectiveness. The IPO, which will be priced between 39 and 41, intends to generate money for a number of reasons, such as financing the purchase of a new formulation factory and covering working capital requirements.

Even with the bright future, there are always some hazards. Critical factors to take into account include dealer payment cycles, regulatory compliance for licences, and challenges in maintaining brand recognition. An further degree of caution is added by the delays and uncertainty related to the use of Net Proceeds for subsidiary investments and plant development. Given these considerations, potential investors have to carefully consider the risks involved, comprehend the IPO's goals, and perform a comprehensive examination of the financial statistics. Although Nova Agritech is a desirable investment due to its diverse product line and strong financial results, caution is advised. Making an informed investment selection will mostly depend on keeping up with market developments and carrying out due diligence.

IMPORTANT DATES

Articles

Comments