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Below are Perspective on Today’s IPO listing of India Pesticides by Ms. Sneha Poddar,  AVP, Research, Broking & Distribution, Motilal Oswal Financial Services Ltd

“India Pesticides listed strongly on the exchanges today with  21% premium at INR 360/Share against its issue price of Rs296/share. It had seen healthy overall subscription of 29x, given its presence in the fast growing agrochemical space. IPL is the sole Indian manufacturer of five TECHNICALS and among the leading manufacturers globally for Captan, Folpet and Thiocarbamate Herbicide, in terms of production capacity. Global agro-chemicals market is expected to grow at 7% CAGR to USD86bn by 2024 and IPL is well placed to tap this opportunity. Technicals in India which is strongly driven by export led demand and contract manufacturing, is expected to grow at 8% CAGR. With China+1 strategy, it opens huge opportunity for Indian players like IPL. IPL plans to tap this opportunity by manufacturing complex off patented technicals, wherein 19 Technicals are expected to go off-patent between CY19-26 (opportunity of >USD4.2bn). We like IPL given its presence in fast growing agrochemical space, diversified product portfolio and robust financials. Expanding product portfolio, growing customer base and increasing wallet share of existing customers can help IPL maintain its growth momentum. It is reasonably valued at 30.8x FY21 P/E, vis-à-vis peers, while it enjoys higher RoE of 36%.”

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