Paradeep Phosphates shares listed on the stock exchanges today at a marginal premium to the IPO price amid the bullish market momentum. Shares of the company began trading on the NSE at Rs 44 per share, up/down 4.76% from the IPO price of Rs 39-42 per share and on the BSE the stock debuted at Rs 43.55 apiece. The fertilizer company came with its IPO earlier this month and was fully subscribed by investors of all categories, except NIIs. The company had a market capitalisation of Rs 3,547 crore on its market debut.
Paradeep Phosphates’ Rs 1,501 crore IPO was a mix of fresh issue of equity shares and an Offer For Sale. The issue was oversubscribed by Qualified Institutional Buyers, bidding for their portion 3.01 times while the Retail Investor Portion of the issue was subscribed 1.37 times. Non-Institutional Investors were not gung ho on the issue and failed to fully subscribe to their portion. This took the overall subscription to 1.75 times.
The promoter shareholding in the company, post issue, has come down to 56.1% from 100% pre-IPO. The Government of India, as one of the promoter entities, is fully offloading its stake (19.55%) in the company.
Coromandel International, Chambal Fertilizers Chemicals, and Deepak Fertilizers and Petrochemicals are some of the Paradeep Phosphates listed peers.
Analysts held positive views on Paradeep Phosphates. “At higher price band of Rs 42, paradeep Phosphates is demanding an FY21 EV/Sales multiple of 0.7x, which is at significant discount to the peer average of 1.1x,” said Choice Broking in a note. They had assigned a “SUBSCRIBE” rating for the issue. Similarly, Marwadi Financial Services noted that considering the FY21/FY22(Annualised) EPS of Rs 2.74/Rs 5.94 on a post issue basis, the company listing at a P/E of 15.32x/7.07x while peers namely Coromandel International and Deepak Fertilisers & Petrochemicals are trading at PE of 16.9x and 12.9x.
Through the funds raised as a part of the fresh issue of equity shares, Paradeep Phosphates plans to part-finance the acquisition of the Goa Facility and repayment/prepayment of certain of the borrowings.