Nova Agritech files IPO papers with Sebi, Nutalapati Venkatasubbarao to exit company

The net fresh issue proceeds will be utilised by the company for setting up a new formulation plant for the subsidiary Nova Agri Sciences

Nova Agritech, the Telangana-based agri-input manufacturer, has filed preliminary papers with the capital market watchdog Sebi to raise funds via an initial public offering (IPO).

The IPO comprises a fresh issuance of shares worth Rs 140 crore, and an offer for sale of 77.58 lakh equity shares by non-promoter Nutalapati Venkatasubbarao.

In fact, Nutalapati intends to sell its entire shareholding in the company via an offer for sale. He currently holds an 11.9 percent stake (77.58 lakh shares) in the company and the rest is held by promoters.

The agri-input manufacturer may consider a pre-IPO placement of Rs 25 crore before filing the RHP. If the said pre-IPO placement is undertaken, then accordingly its fresh issue size will get reduced.

Nova offers soil health management, crop nutrition and crop protection products focused on a tech-based farmer-driven solution approach. Currently, crop protection products are manufactured by its subsidiary Nova Agri Sciences.

As of January 2023, it has received 629 product registrations comprising seven registrations in the soil health management category, 168 in the crop nutrition category, four in the biopesticide category and 450 in the crop protection category.

The net fresh issue proceeds will be utilised by the company for setting up a new formulation plant for the subsidiary Nova Agri Sciences and for the expansion of the existing formulation plant.

The funds are also used for working capital requirements, besides general corporate purposes.

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Nova with a total dealer network of approximately 10,900 dealers, is currently spread across 16 states of India. It has also entered into marketing, distribution and supply agreements with certain third parties in Bangladesh, Sri Lanka and Vietnam and is currently awaiting the necessary permission to start its business in these jurisdictions.

On the financials front, the company has recorded a 117.3 percent increase in profit at Rs 13.7 crore for the financial year 2021-22 on strong operating performance, compared to the previous year. Revenue in the same period rose by 15.5 percent to Rs 185.6 crore.

For the first half of FY23, it reported a profit of Rs 6.86 crore on revenue of Rs 81.65 crore.