IPO NSE EMERGE: Nova Agritech Limited

Agri-input manufacturer, Nova Agritech Ltd. which offers soil health management, crop nutrition and crop protection products focused on tech-based farmer driven solution approach, has fixed the price band of Rs 39- to 41- per Equity Share of face value Rs 2 each for its maiden initial public offer.  The Initial Public Offering of the Company will open on Monday, January 23, 2024, for subscription and close on Wednesday, January 25, 2024. Investors can bid for a minimum of 365 Equity Shares and in multiples of 365 Equity Shares thereafter. The issue consists of a fresh issue of equity shares aggregating to Rs 11,200 Lakhs and an offer-for-sale (OFS) of up to 77,58,620 equity shares by the selling shareholder Nutalapati Venkatasubbarao.

Out of the net proceeds from the fresh issue, an amount of Rs 1,420.11 Lakhs will be utilised for investment in its subsidiary, Nova Agri Sciences Private Limited for setting-up a new formulation plant, Rs 1,048.95 Lakhs for funding Capital Expenditure by the Company, towards expansion of its existing formulation plant, Rs 2,665.47 Lakhs for funding its working capital requirement of the Company, Rs 4,335.85 Lakhs for investment in its subsidiary, Nova Agri Sciences Private Limited for funding working capital requirements and the balance amount from the net proceeds will be utilised for general corporate purposes.

Incorporated in 2007 with an objective to become a one-stop solution provider for the farming community, the Company manufactures, distributes and markets a wide range of product categories consisting of (a) soil health management products; (b) crop nutrition products; (c) bio stimulant products; (d) bio pesticide products (e) Integrated Pest Management products; (f) new technologies; and (g) crop protection products.

As on November 30, 2023, the Company has received a total of 720 product registrations comprising of 7 registrations in the soil health management category, 176 registrations in the crop nutrition category, 4 registrations in bio pesticide category, 7 registrations under Technical Indigenous Manufacture and 526 registrations in the crop protection category. In addition to this, the Company has applied for 22 new registrations whereas its subsidiary Nova Agri Sciences Private Limited has applied for 14 new registrations for new products across various categories.

It has a total dealer network comprising of approximately 11,722 dealers out of which approximately 6,769 dealers are active to whom it has distributed and sold its products during the current financial year. Its dealer network is currently spread across 16 states of India.

It has also entered into marketing, distribution and supply agreements with certain third parties in Bangladesh, Sri Lanka and Vietnam and are currently awaiting the necessary permission to start business in these jurisdictions. Nova Agritech’s revenue from operations increased by 13.47% for the financial year 2022-23, primarily on account of an increase in business volumes on the back of technical import registrations, foraying into new states like Tamil Nadu and consolidation of business in existing states namely, Telangana, Andhra Pradesh and Karnataka. Profit after tax increased by 49.69%.