Nova Agritech stock lists at 36% premium to IPO price

Nova Agritech IPO: Ahead of the listing, shares were trading at a 30 percent premium in the grey market

Nova Agritech made a decent debut, with the shares of the company listing at a 36.5 percent premium over the IPO price, on January 31. The shares opened at Rs 55 on the NSE and Rs 56 on the BSE against an issue price of Rs 41. Analysts expected the stock to list with a 40-70 percent premium, somewhere between Rs 58 and 72.

Ahead of the listing, the Nova Agritech shares were trading at a 30 percent premium in the grey market, an unofficial ecosystem where shares start trading before the allotment in the IPO and continue till the listing day. Most investors track the grey market premium (GMP) to get an idea of the listing price.

Also read: All you need to know about Nova Agritech IPO

The issue had received a strong response from investors, getting subscribed 109.37 times, high net-worth individuals (HNIs) remained at the forefront, buying 227.19 times the allotted quota. Retail investors picked up 77.12 times the portion set aside for them, while the part reserved for qualified institutional buyers was booked 79.31 times.

The IPO, which opened for subscription on January 23 and closed on January 25, comprised a fresh issue of 2.73 crore shares worth Rs 112 crore and an offer-for-sale of 77.58 lakh shares worth Rs 31.81 crore. The price band for the offer was fixed at Rs 39-41 a share.

Also read: Nova Agritech IPO: 10 things to know about the Rs 143.8 crore issue

Out of the issue proceeds, Rs 14.20 crore will be used for investment in subsidiary Nova Agri Sciences to set up a formulation plant, Rs 10.49 crore for funding the capital expenditure of Nova Agritech and the expansion of its existing plant, Rs 26.65 crore to meet the working capital requirements, and Rs 43.36 crore for investment in Nova Agri Sciences.

The company’s promoters are Suraksha Agri Retails (India), Malathi S, and Kiran Kumar Atukuri. The book-running lead managers of the IPO were Keynote Financial Services and Bajaj Capital while Bigshare Services was the registrar.

Also read: Nova Agritech IPO: Hunting for high growth capital, eyes ‘one-stop solution provider’ tag

Nova Agritech is an agri-input manufacturer and offers soil health management, crop nutrition, and crop protection products focused on a tech-based farmer-driven solution approach, wherein it mainly offers ecologically sustainable and nutritionally balanced products based on its research and development (R&D). The production of crop protection products is facilitated by its subsidiary, Nova Agri Sciences.