Advance Agrolife
IPO Size: Rs. 193 cr, Entirely Fresh Issue
- for working capital of Rs.135 cr
Price band: Rs. 95-100 per share
M cap: Rs. 643 cr, implying 30% dilution
IPO Date: Tue 30th Sep to Fri 3rd Oct 2025, Listing Wed 8th Oct 2025
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Jaipur based Agro Chemicals Company
Advance Agrolife manufactures insecticides, herbicides, fungicides and has its 3 plants, with an aggregate installed capacity of 89,900 MTA, which was 49% utilized in FY25. In the past 2 years, installed capacity has increased by 70%, but production is up by only 29% during this period. Company generates revenue mainly from Rajasthan, UP, Gujarat, Haryana.
Slow Growing Financials
FY25 revenue stood at Rs. 502 cr, up 10% YoY. Company clocks 10% EBITDA margin, but high working capital requirement (4 months debtors and 2 months inventory) keeps net debt to equity ratio at nearly 0.8:1, which reduced PAT margin to just 5%. In FY25, PAT rose by just 4% YoY to Rs. 26 cr PAT, with an EPS of Rs. 5.7, on an equity of Rs. 45 cr. As of 31.3.25, net debt stood at Rs. 77 cr on net worth of Rs. 101 cr.
Fully Valued Nano Cap Stock
FY26E EPS is estimated at Rs. 5.8, due to a large dilution of 30% in the IPO. This discounts the mc ap of Rs. 643 cr by a PE multiple of 17x, on current year basis, which is quite high for a nano cap stock with low single digit profit growth. Even larger peer Insecticides India, with Rs. 2,000 cr topline and 7% net margin is trading at a PE of 14x.
While H1FY26 outlook I seen positive, due to early monsoon and timely sowing this year, Advance Agrolife’s IPO valuation fully captures potential of future earnings, for the size of operations.
30th Sep 2025 at 04:50 pm