MUMBAI: Fertiliser maker Paradeep Phosphates has set the offer price for its initial public offering (IPO) in the band of Rs 39-42 per share, implying a market valuation of Rs 3,248-3,421 crore. Through the IPO, the government will divest its entire holding of 19.55% in the company.
Saroj Poddar, the son-in-law of K K Birla, along with his Moroccan partner OCP, had acquired 74% in the then ailing Paradeep from the government in 2002. Their stake subsequently went up to 80.45% following a rights issue. The promoters had initially planned to raise Rs 2,150 crore through the IPO, but decided to reduce the issue size by 30% to Rs 1,502 crore due to weak market conditions and internal factors.
The IPO will open on May 17 and close on May 19. Paradeep will be the seventh company from Poddar’s empire to be listed on the stock exchanges after Zuari Global, Zuari Agro Chemicals, Chambal Fertilisers, Mangalore Chemicals, Texmaco Infrastructure Holdings and Texmaco Rail Engineering.
Besides the stake-sale by the government, the IPO comprises a fresh issuance of equity shares worth Rs 1,004 crore. This amount will be used by Paradeep to finance the purchase of the Goa facility from Zuari Agro Chemicals and to repay certain borrowings.
Under Poddar’s leadership, Paradeep’s fortunes have turned around. It reported a profit of Rs 363 crore for the nine-month period ending December 31 2021, while profit for fiscal 2021 was Rs 223 crore. The company’s shares are expected to list on the BSE and NSE on May 27.
Poddar and OCP will be selling a tiny portion of their stake (1.05%) in the IPO to cover expenses related to the fund-raise in line with Sebi rules. Their holding in Paradeep will be around 56% after the IPO as a result of their stake-sale and issuance of fresh equity to new investors.
