About the Company:
Paradeep Phosphates Ltd is primarily engaged in manufacturing, trading, distribution and sales of a variety of complex fertilizers such as DAP, three grades of Nitrogen-Phosphorus-Potassium (“NPK”) (namely NPK-10, NPK-12 and NP-20), Zypmite, Phospho-gypsum and Hydroflorosilicic Acid (“HFSA”).
Company is also engaged in the trading, distribution and sales of Muriate of Potash (“MOP”), Ammonia, Speciality Plant Nutrients (“SPN”) and City compost.
Company’s fertilizers are marketed under some of the key brand names in the market ‘Jai Kisaan – Navratna’ and ‘Navratna’.
Company is the second largest private sector manufacturer of non-urea fertilizers in India and the second largest private sector manufacturer in terms of Di-Ammonium Phosphate (“DAP”) volume sales for the nine months ended December 31, 2021
Company’s History:
Company was incorporated in 1981. Zuari Maroc Phosphates Private Limited (“ZMPPL”), a joint venture of Zuari Agro Chemicals Limited (“ZACL”) and OCP Group S.A. (“OCP”), currently holds 80.45% of the equity share capital of the Company, with the balance being held by the Government of India.
About Company’s Promoters:
Company is part of the Adventz Group, as well as OCP. The founding chairman of the Adventz Group was the late Dr. K.K. Birla and the current chairman is Mr. Saroj Kumar Poddar.
The Adventz Group operates in several businesses and has a strong presence in the agribusiness, engineering and infrastructure businesses and emerging lifestyle
business. OCP, founded in 1920, with revenues of over US$6.3 billion in 2020.
The group is one of the leading producers of Phosphate rock globally and operates largely in the Morocco and Western Sahara region which has approximately 70% of the global Phosphate rock reserves,and is owned 95% by the Moroccan government.
About Phosphate rock:
Phosphate rock is processed to produce phosphorous, which is one of the three main nutrients most commonly used in fertilizers (the other two are nitrogen and potassium).
India has negligible Phosphate reserves and is dependent on imports of Phosphate rock (a source raw material) or Phosphoric Acid (an intermediate raw material) or DAP (finished phosphatic fertilizer).
Company’s manufacturing facility:
Company’s manufacturing facility is located in Paradeep, Odisha and includes a DAP and NPK production facility, a Sulphuric acid production plant and a Phosphoric acid production plant. Company utilize Sulphuric and Phosphoric acids for manufacturing DAP and NPK.
As of March 31, 2022, (i) Company’s total annual granulation capacity of DAP and NPK production plant was approximately 1.50 million MT.
(ii) Company’s total annual installed capacity of Sulphuric acid production plant was approximately 1.30 million MT.
(iii) Company’s total annual installed capacity of Phosphoric acid production plant was 0.30 million MT,.
Company’s Distribution Network:
Company has established an extensive sales and distribution network, with a strong presence in the eastern part of India.
As of March 31, 2022, company distributed products across 14 states in India through our network of 11 regional marketing offices and 468 stock points.
Company’s network includes 4,761 dealers and over 67,150 retailers, catering to over five million farmers in India, each as of March 31, 2022.
Company’s Storage facilities:
Company has facilities to store raw material in Paradeep, Odisha and at any point of time, company can store 120,000 MT of Phosphate rock, 65,000 MT of Phosphoric acid solution, 55,000 MT of sulphur, 45,000 MT of Sulphuric acid, 40,000 MT of liquid ammonia and 35,000 MT of MOP.
Company’s proximity to Paradeep port:
Company’s manufacturing facility is strategically located close to the Paradeep port and have a closed conveyor belt which is 3.4 km long connecting the Paradeep port to the manufacturing facility.
Company is acquiring a fertilizer plant in Goa:
With a view to increase the size of the Company, with a product portfolio comprising both Phosphatic and Nitrogenous fertilizers and accessing the high fertilizer demand markets of Maharashtra and Karnataka.
On March 1, 2021, Company entered into a business transfer agreement (“BTA”) with ZACL for the purchase of its fertilizer plant in Goa by the Company as a going concern on a slump sale basis, for a total consideration equal to the enterprise value of USD 280 million, equivalent to Rs.2052.3 crores.
Upon the completion of the Goa Transaction, Company will acquire the business of developing, manufacturing and trading of urea and NPK products carried out at the
Goa Facility.
Subsequent to the acquisition of Goa Facility, company’s total fertilizer production capacity is expected to increase by 1.2 million MT.
Plans to increase production:
Company is currently in the process of increasing the annual granulation capacity of DAP and NPK production plant to 1.8 million MT from 1.2 million MT which is expected to be completed by May 2022.
Management Team:
- Mr. Saroj Kumar Poddar (Designation: Chairman and Non-executive Director)
- Mr. Narayanan Suresh Krishnan (Designation: Managing Director and Executive Director)
Objectives of the Issue:
Offer for Sale: (Rs.498 cr)
- Each of the Selling Shareholders will be entitled to the proceeds of the Offer for Sale. Company will not receive any proceeds from the Offer for Sale.
Fresh Issue: (Rs.1040 cr)
- Part-financing the acquisition of the Goa Facility.
- Repayment/prepayment of certain of our borrowings.
- General corporate purposes.
Positives for the Company:
- Well-positioned to capture favorable Indian fertilizer industry dynamics supported by conducive government regulations.
- Second largest private sector manufacturer of Phosphatic fertilizers in India with a focus on the non-urea
segment, in terms of phosphatic fertilizer (DAP and NPK complexes) capacity as of March 31, 2022. - Driving raw material efficiency through backward integration of facilities and effective sourcing.
- Secure and certified manufacturing facility and infrastructure and unutilised land available for expansion.
- Strategic location of our manufacturing facility and sizeable material storage, handling and port facilities.
- Established brand name backed by an extensive sales and distribution network.
Financials of the Company:
| (in Crores) | FY 19 | FY 20 | FY 21 | 31st Dec 21 |
|---|---|---|---|---|
| Revenue | 4397.2 | 4227.7 | 5183.9 | 5973.6 |
| Net Profit | 156.6 | 190.1 | 223.9 | 361.2 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 17th May 2022 |
| Issue Closes on:. | 19th May 2022 |
| Issue Price | Rs.39 – 42 |
| Face Value | Rs.10 |
| Retail Category Allocation | 35% |
| Minimum Lot | 350 Shares |
| Minimum Investment | Rs.14,700 |
| Issue Constitutes | 44.48% |
| Issue Size | Rs.1538 cr ($199 million) |
| Market Cap | Rs.3456 cr ($ 448 million) |
| Listing at | NSE & BSE |
| Equity Shares Offered (Fresh) | 24,76,19,047 (Rs. 1040 cr) |
| Equity Shares Offered (OFS) | 11,85,07,493 (Rs. 498 cr) |
| Total Equity Shares Offered (Fresh + OFS) | 36,61,26,540 (Rs. 1538 cr) |
| Equity Shares Prior to the Issue | 57,54,50,000 |
| Equity Shares after the Issue | 82,30,69,047 |
Also Read : List of Upcoming IPO’s in India.
Also Read : List of Upcoming SME IPO’s in India.
Valuation of Peer Group Companies:
| Company Name | Face Value | EPS | PE Ratio | RoNW | NAV |
|---|---|---|---|---|---|
| Paradeep Phosphates Ltd | 10 | 3.88 | 10.82 | 12.22% | 38.04 |
| Coromandel International Ltd | 1 | 45.22 | 18.72 | 25.81% | 176 |
| Chambal Fertilizers Chemicals Ltd | 10 | 39.76 | 11.57 | 33.30% | 126 |
| Deepak Fertilizers and Petrochemicals Ltd |
10 | 39.20 | 16.91 | 15.04% | 263 |
Important Dates:
| Finalization of Basis of Allotment | on or Before 24th May 2022 |
| Initiation of Refunds | on or Before 25th May 2022 |
| Credit of Equity Shares: | on or Before 26th May 2022 |
| Listing Date: | on or Before 27th May 2022 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 3.88 | 10.82 | 12.22% | 38.04 |
| Check IPO Allotment Status: |
|---|
Link InTime Website: https://linkintime.co.in/PublicIssue/BSE IPO Website: https://www.bseindia.com/IPO/Allotment |
| Company Contact Info: |
|---|
| Paradeep Phosphates Ltd 5th floor, Orissa State Handloom Weavers’ Co-operative Building Pandit J.N. Marg Bhubaneswar – 751 001, Odisha, India Tel: +91 674 6666 100/ 6666 138 E-mail: cs.ppl@adventz.com Website: www.paradeepphosphates.com |
| IPO Registrar Info: |
|---|
| Link Intime India Private Limited C-101, 1st Floor, 247, Lal Bahadur Shastri Marg, Vikhroli (West), Mumbai 400 083 Maharashtra, India Tel: +91 22 4918 6200 E-mail: ppl.ipo@linkintime.co.in Website: www.linkintime.co.in |
