Sharda Cropchem Jumps 76% on Market Debut

Shares in Sharda Cropchem which is into marketing and distribution of a wide range of formulations and generic active ingredients, jumped 76 per cent in its debut on Tuesday. The stock, which got allotted at the higher end of its price band Rs145-Rs 156, jumped to Rs. 274 on the National Stock Exchange.

The company had got a very good response for its IPO. The issue was oversubscribed 60 times. The qualified institutional buyers (QIB) category was oversubscribed over 32 times whereas the high networth individuals (HNI) segment was oversubscribed 251 times. The retail segment also showed significant interest in the IPO as it was oversubscribed 6 times in the segment.

Sharda Cropchem raised nearly Rs. 352 crore through the IPO.

Business & Promoter profile of Sharda Cropchem

Sharda Cropchem is a Mumbai-based company which is into marketing and distribution of a wide range of formulations and generic active ingredients globally. It's core strength lies in identifying generic molecules, preparing dossiers, seeking registrations, marketing and distributing formulations or generic active ingredients in fungicide, herbicide and insecticide segments.

Mr. R. V. Bubna, a Chemical Engineer from IIT, Bombay along with Mrs. Sharda R. Bubna had founded the company in 1987. Prior to IPO the promoters held 84.13 per cent stake in the company and a non-institutional investor, HEP Mauritius held 15.87 per cent stake.

Through this IPO, HEP Mauritius has offloaded its entire stake of 15.87 per cent and the promoter has reduce its holding to 75 per cent. The sole purpose of this IPO was to list the company on the exchanges and give an exit to HEP Mauritius.

Valuation

The company had reported earnings per share of Rs 11.85 in FY14 and Rs 9.35 in FY13 and Rs 7.62 in FY12. As of March 31, 2014 the company had a net asset value of Rs 61.28 per share, which indicates that each shareholder will get Rs 61.28 per share if the company were liquidated.

At today's highest market price of Rs 274 the shares trades at 23.12 times its FY14 earning per share whereas its closest peers Rallis India trades at 28 times and UPL trades at 13 times its FY14 earnings per share.