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Heranba Industries ltd: Is It A Multibagger Stock in Agrochemical Industry?
Heranba Industries ltd: Is It A Multibagger Stock in Agrochemical Industry?
Heranba Industries, founded in 1994 is one of the prominent players in the agrochemical industry. Agriculture is the most primitive means of living that laid the foundation of civilization which eventually introduced the concept of a better standard of living which paved the path for the agricultural revolution.
The agrochemical industry was another industry that grew with time with the rise of the agricultural industry. Heranba Industries is a major player in the agrochemical industry with the main aim to provide innovative products to farmers to maximize their farm output.
Heranba Industries is a manufacturer, exporter, and marketing company specializing in manufacturing, exporting, and supplying a range of products such as public health, Insecticides, technical, fungicides, etc. Heranba Industries Limited is based in Vapi, Gujarat.
They are one of the leading domestic producers of synthetic pyrethroids. A pyrethroid is an organic compound made from Pyrethrin which is a natural element. Pyrethroids are mainly used for three purposes.
- Agriculture - Insecticides, Pesticides
- Public Health - Mosquito Sprays, Pharmaceuticals
- Animal Health - Cypermethrin
Heranba IPO details
Heranba came up with its IPO from 23rd February to 25th February 2021 and it was listed on the stock exchange on 5th March 2021. The issue price of Heranba Industries Ltd IPO was Rs. 627 per equity share and Heranba Industries IPO allotment date was fixed on March 2, 2021.
- Heranba Industries Ltd IPO Opening date: Feb 23, 2021
- Heranba Industries Ltd IPO Closing date: Feb 25, 2021
- Issue Type: Book Built Issue
- Face Value: Rs.10 per equity share
- IPO Price: Rs.626 to Rs.627 per equity share
- Market Lot: 23 shares
- Minimum Order Quantity: 23 shares
- Listing Place: BSE, NSE
Heranba Industries IPO Allotment Date: Mar 2, 2021
- Issue Size: Equity shares of Rs.10 (aggregating up to Rs.635.24 Cr.)
- Fresh Issue: Equity shares of Rs.10(aggregating up to 60 Cr.)
- Offer for Sale: 9,015,000 Equity shares of Rs.10
Shareholding pattern for Individuals
Objectives of the Heranba Industries ltd IPO Issue
The primary objectives of the Heranba IPO Issue are:
- To meet the working capital requirements of the business.
- To carry out the company’s working capital requirements.
- To successfully perform the company’general corporate purposes.
Response to the Heranba Industries ltd ipo
Heranba Industries IPO garnered a good response from the public on the day of the issue as the Rs.625 crore Heranba IPO was subscribed 83.3 times on the final day.
Qualified institutional buyers led the subscription spree of the Heranba Industries Ltd. IPO as their allotted shares were subscribed 67.4 times on the closing day. On the other hand, retail investors also showed great interest in the IPO, and their allotted quota was subscribed 11.84 times on the last day.
Competitor’s Analysis
Heranba has shown significant growth in its sector, especially in the past few years which is one of the major reasons that its IPO was oversubscribed by investors.
The company is almost debt-free with one of the lowest debt-to-equity ratios in its industry. In addition to that Heranba has the highest ROE among its competitors which indicates that its investors availed better return from their investments as to others in the industry.
Heranba Limited has the lowest PE ratio in its sector making it significantly undervalued as compared to its peers and good stock to buy or hold on to.
Current Standing of Heranba Stock
As of 14th October 2022, Heranba’s share price opened at Rs.525.20 on NSE. Today’s share price of Heranba Industries is less than the Intrinsic value of the stock and the stock has been giving higher returns on equity than Bank FD.
Technical Analysis of Heranba’s Stock Price
There is a squeeze in the Heranba industries on the downside, showing a lack of interest in sellers to sell and forming a type of falling wedge pattern on the weekly charts which is the reversal pattern for the upside. As soon as it breaks the upper resistance of the pattern with the previous high, it begins its upward journey.
Financial Analysis of Heranba Industries
The sales of Heranba Industries Ltd have been rising in the financial year ending March 2022 in comparison to its five years and three years average and the same is the case with its profit for the year ending, 2022 which is also on the rise in comparison to its three and five years average as it is an important indicator which you need to keep in mind before selecting stocks for a long-term.
Lower debt is an indicator that a company is in a good financial position and it will grow in the future, however, it's not certain that the stock will turn out to be a multi-bagger. You can still learn how to find multibagger stocks by analyzing multiple factors of a stock.
The return on equity of Heranba Industries though declined a bit in the last three years but in the year ending March 2022, it also has shown considerable growth.
Future Prospects of Heranba Ltd.
The company has shown tremendous growth since the slump of Covid-19, though the profit growth is yet to surpass the pre-covid levels.
Based on historic trends, the intrinsic share price of Heranba stock is Rs.674.42 whereas today’s share price of Heranba stock is around Rs.520 and the PE ratio of the company is 11.70 which is lower than the industry PE of 29.64, which indicates the stock is currently undervalued and give multi-bagger returns in the future. Get to know about other multibagger stocks of 2022
However, the growth of the company majorly depends on the future demand of the industry. According to IMARC Group, the Indian pesticides market is expected to reach INR 320 billion by, 2027.
The Average total revenue of the last 3 years of Heranba has been Rs. 1,221.1 Cr and its total revenue for the year ending 2022 has been Rs. 1,469.7 Cr which shows that the company’s sales have been on an upsurge in recent times.
Currently, Heranba Ltd is a stock that sellers are holding onto given its good future prospects and the fact that it is undervalued, whereas its share prices are expected to rise in the future.
