IPO update: Epack Durable sets price band at ₹218-230 per share; Nova Agritech at ₹39-41 apiece

In a fresh development in the IPO market, two more companies - Epack Durable and Nova Agritech - have unveiled their price bands for their public issues, which are set to hit Dalal Street by the end of this week. While Epack Durable, the second largest original design manufacturer of room air conditioners in India, has set its price band at ₹218-230 per share for its public issue, Nova Agritech IPO has fixed its IPO price in the range of ₹39-41 apiece.

The Uttar Pradesh-based Epack Durable looks to raise ₹640 crore at the upper end of the price band, which is a mix of a fresh issue of equity shares worth ₹400 crore and an offer for sale (OFS) of 1.04 crore equity shares by the existing shareholders.

On the other hand, Nova Agritech, a manufacturer of agricultural fertilisers, aims to garner around 143.81 crore at the upper end of the price band. The IPO comprises a fresh issue of equity shares worth ₹112 crore and an OFS of 77.58 lakh equity shares by Nutalapati Venkatasubbarao, who owns 11.97% stake in the company.

Epack Durable IPO to open on Jan 19

The public issue of Epack Durable will open for subscription on January 19 and close on January 23. The anchor book will open for a day on January 18. This is going to be the third public issue of the calendar year 2024 after Jyoti CNC Automation and Medi Assist Healthcare Services launched their IPOs earlier this month.

As per the offer document filed with capital market regulator SEBI, the lot size is 65 equity shares and in multiples thereof. This means the minimum application amount for retail investors will be ₹14,950 for 1 lot, or 65 equity shares.

The firm has reserved half of the issue for qualified institutional buyers (QIBs), up to 15% for non-institutional investors (NIIs), and the remaining 35% for retail investors.

The company, which counts Blue Star, Daikin Airconditioning India, Voltas, Havells India, Haier Appliances (India), Bajaj Electricals as its customers, intends to use capital raised from the issuance of fresh equity shares to expand its manufacturing facilities, repay debts, and meet general corporate purposes. Out of ₹400 crore fresh capital, ₹230 crore will be used for the expansion of manufacturing facilities, ₹80 crore for repaying debts, and the remaining for general corporate purposes.

For the financial year ending March 31, 2023, Epack Durable reported a 83.4% year-on-year growth in net profit to ₹32 crore, while revenue from operations rose 66.5% YoY to ₹1,539 crore. EBITDA (earnings before interest, tax, depreciation and amortisation) stood at ₹102.5 crore in FY23, up 49% as compared to the previous fiscal year. However, the margin dropped 78 basis points to 6.66%, dented by higher input costs.

Nova Agritech IPO to begin on Jan 22

The IPO of Nova Agritech will open on January 22 and will close on January 24. The allocation to anchor investors is scheduled to take place for a day on January 19.

The company, which specialises in soil health, crop nutrition, and protection products, has reserved 50% of the shares for QIB, up to 15% for NII, and up to 35% for retail investors. 

Out of the ₹112 crore raised from the fresh issuance, ₹14 crore will be utilised for investment in its subsidiary, ₹10 crore for funding capex, ₹26 crore for meeting working capital requirements and the remaining for investment in the subsidiary Nova Agri Sciences.

For the six months ending September FY24, the company posted consolidated net profit of ₹10.4 crore and a revenue of ₹103.22 crore. For the full financial year 2022-23, the consolidated net profit grew 49.7% to ₹20.5 crore, while revenue rose 13.4% to ₹210.6 crore. On the operating front, EBITDA surged 39.3% to ₹38.7 crore, while margin improved by 342 bps to 18.4%.

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