Paradeep Phosphates shares list at premium, rise 13% post debut

Shares of chemical company Paradeep Phosphates made a solid debut on the domestic bourses on Friday, with stock pricing listing at 4% premium over its issue price. On the Bombay Stock Exchange (BSE), the share of fertiliser company debuted at ₹43.55, a 4% premium against its issue price of ₹42 per share. The smallcap stock opened at ₹44, up 4.76% on the National Stock Exchange (NSE).

Post listing, Paradeep Phosphates shares gained as much as 12.5% to hit an intraday high of ₹47.25 on the BSE. It touched a low of ₹42.95 during the session so far. On the volume front, 67.6 lakh shares worth ₹30.6 crore changed hands over the counter, while market capitalisation surged to ₹3,653 crore. Meanwhile, the BSE Sensex was trading 593 points higher at 54,845 levels at the time of reporting.

This is the ninth company to list on the Dalal Street in the current financial year 2022-23 (FY23) after Delhivery, Venus Pipes and Tubes, Prudent Corporate Advisory Services, Life Insurance Corporation (LIC) of India, Rainbow Children's Medicare, Campus Activewear, Hariom Pipe Industries, and Veranda Learning Solutions. Among these, Hariom Pipe, Campus, and Veranda Learning have been the best performing IPOs so far, delivering returns of 40%, 21.5%, and 14.5%, respectively, returns to date against their issue prices. LIC of India, the country’s biggest-ever IPO, failed to garner a strong response from investors, with the stock price falling nearly 9% over its issue price.

Paradeep Phosphates shares begin trading on the domestic bourses after it successfully raised ₹1,500 crore through initial public offering (IPO). The shares were listed and admitted to dealings on the exchange in the list of ''B'' group securities.

The issue managed to subscribe 1.75 times, with quota reserved for retail investors receiving 1.37 times bid. The portion for high-networth individuals (HNI) was booked 82% and the institutional investor category subscribed three times.

Paradeep Phosphates (PPL), the second-largest private sector manufacturer of non-urea fertilisers and Di-Ammonium Phosphate (DAP) in terms of sales volume, intends to use IPO proceeds to partly finance the acquisition of the Goa facility, repayment of loans, and to meet general corporate purposes.

Incorporated in 1981, PPL is a joint venture of Zuari Agro Chemicals Limited (ZACL) and OCP Group S.A. (OCP), which currently holds 80.45% of the equity share capital of the company, with the remaining being held by the Government of India. It is engaged in manufacturing, trading, distribution and sales of fertilizers such as DAP, three grades of NitrogenPhosphorus-Potassium (NPK), Zypmite, Phospho-gypsum etc. with a strong presence in the eastern part of India.

The company markets its products across 14 states under the brand names ‘Jai Kisaan – Navratna’ and ‘Navratna’. Its manufacturing facility is located in Paradeep, Odisha.

The board of the company is scheduled to meet on May 28 to consider and approve the financial results for the quarter and the year ended March 31, 2022. For the first nine months of FY22, the chemical company reported revenue from operations and PAT at ₹5,960 crore and ₹362.8 crore, which grew 9% and 18% CAGR in FY19-21 respectively, as per Geojit Report.

As of March 31, 2022, PPL’s outstanding borrowing stood at ₹2,957 crore, while the company proposes to utilise ₹300 crore from the net proceeds towards repayment of loans.