Dharmaj Crop Guard Limited IPO Review

Dharmaj Crop Guard Limited incorporated on January 19, 2015, is an agrochemical company engaged in manufacturing, distributing, and marketing agrochemical formulations such as insecticides, fungicides, herbicides, plant growth regulators, micro fertilizers, and antibiotics to the B2C and B2B customers. The company also engages in the marketing and distribution of agrochemical products to Indian farmers.

Get your Mutual Funds and Equity portfolio evaluated by a Registered Investment Advisor (RIA) for FREE, but spots are limited. Register now

The company’s manufacturing facility is located in Ahmedabad, Gujarat, India. Dharmaj Crop Guard Limited also has research and development (“R&D”) centers at the manufacturing facility. As of November 30, 2021, Dharmaj Crop Guard, Limited had more than 196 institutional products that they sold to more than 600 customers based in India and the international markets. As of November 30, 2021, the company exported its products to more than 60 customers across 20 countries. The company’s branded products are sold in 12 states through a network comprising over 3,700 dealers having access to 8 stock depots in India, as of November 30, 2021.

Promoters & Shareholding:

Rameshbhai Ravajibhai Talavia, Jamankumar Hansarajbhai Talavia, Jagdishbhai Ravjibhai Savaliya, and Vishal Domadia are the company promoters.

Pre Issue Share Holding100.00%
Post Issue Share Holding73.03%

Also read : Market Outlook – Nov’22

Public Issue Details:

Offer for sale: OFS of approx. 1,483,000 equity shares at Rs. 10, aggregating up to Rs. 35.15 Cr and fresh of approx. 9,113,924 equity shares at Rs. 10, aggregating up to Rs. 216 Cr.

Total IPO Size: Rs. 251.15 Cr.

Price band: Rs. 216 – Rs. 237.

Objective: For funding capital expenditure, funding incremental working capital, and for repayment and/or pre-payment.

Bid qty: minimum of 60 shares (1 lot) for Rs. 14,220 and maximum of 14 lots.

Offer period: 28th Nov 2022 – 30th Nov 2022.

Date of listing: 8th Dec 2022.

Get your Mutual Funds and Equity portfolio evaluated by a Registered Investment Advisor (RIA) for FREE, but spots are limited. Register now


  • Diversified product portfolio.
  • Strong R&D capabilities.
  • The company has an established distribution network with strong branded products and stable relationships with institutional customers.
  • Professional and experienced management team.


  • The company requires certain approvals and licenses in the ordinary course of business hence any failure to successfully obtain such registrations would adversely affect the results of its operations and financial condition.
  • The company does not enter into long-term agreements with most of its customers though they have repeat orders from customers.
  • The business is subject to climatic conditions and is cyclical.

Subscribe or avoid?

Sectorial outlook – During the five years 2017-2021, the global pesticides market is estimated to have grown at a CAGR of around 2.5% from $62 billion in 2017 to $68 billion in 2021 and this market is estimated to grow at a CAGR of around 1.6%-1.8% during the period 2022-2027 and is likely to reach approximately USD 75 billion by 2027. Looking at the local level, the output of pesticides in India (which includes 42 technical grades) increased at a CAGR of 8.7% from 213 thousand tonnes in 2017-18 to 295 thousand tonnes in 2021-22. The upward momentum in pesticide industry output is expected to continue going forward backed by growth in food consumption in the domestic market amid an expected increase in population, government support towards agriculture, demand from export markets, horticulture, and floriculture market among others. The penetration of pesticides and agrochemicals in India is low and this poses an opportunity for growth for agrochemical producers. In addition to this, the government’s aim to reduce dependency on China and improve self-sufficiency is expected to support the industry’s backward integration and thus its growth. All of the above are expected to have a positive impact on the sector the company is operating in the long term.

The financials (revenue and net profit) are shown in the graph below:

Valuation – For the last 3 years average EPS is Rs. 10.99 and the P/E is around 21.5x on the upper price band of Rs. 237. The EPS for FY22 is Rs. 11.6 and the P/E is around 20.3x. If we annualize Q1-FY23 EPS of Rs. 7.44, P/E is around 7.9x. It has Rallis (27.45x), India Pesticides (18.53x), Punjab Chemical (17.51x), Bharat Rasayan (24x), Astec Lifesciences (45.92x), and Heranba (10.8x) as its listed peers as per the RHP. The company’s P/E is between 7.9x and 21.5x. Net margins and EPS have been growing consistently. RONW is around 18.15%. Looking at the valuation, it seems to be reasonable.

Recommendation – The company has a diversified portfolio of agrochemical products, an established distribution network with branded products, and strong research and development center with a quality control laboratory but the company is still an emerging player when compared to its peers. After considering all the factors the listing still seems reasonable with good prospects hence we would recommend “Subscribe” to this IPO for investors with a cash surplus in a medium to long-term perspective.


This article should not be construed as investment advice, please consult your Investment Adviser before making any investment decision.

If you do not have one visit mymoneysage.in

Also read : Debt Mutual Funds – Types, Taxation, Indexation benefit, Risk and suitability

myMoneySage.in is an award winning personal finance platform. It helps you aggregate all your personal finance accounts like FD, Equity, Mutual Funds, PPF EPF, NPS including, Credit Cards & Loans etc. It's one place where you can track, plan and invest seamlessly. myMoneySage.in empowers you to invest in zero commission direct plans of mutual funds thereby helping you generate higher on investments. The best part is it comes with a lifetime Free plan.

Switch to direct mutual funds in 3 simple steps, earn 30% more return on your investments. Register to get a FREE myMoneySage account.

You may also like...

error: Content is protected !!