GSP Crop Science
IPO Size: Rs. 400 cr
- Fresh Issue of Rs. 240 cr to repay Rs. 170 cr, of Rs. 479 cr gross debt
- Offer for Sale (OFS) of Rs. 160 cr by the promoter (98% stake to shrink to 72% post IPO)
Price band: Rs. 304-320 per share
M cap: Rs. 1,487 cr, implying 27% dilution
IPO Date: Mon 16th Mar to Wed 18th Mar 2026, Listing Tue 24th Mar 2026
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Gujarat based Agro Chemical Company
GSP Crop Science is a 40-year-old Ahmedabad-based manufacturer of insecticides, herbicides, fungicides, plant growth regulators, having 5 plants across Gujarat and J&K. Company is not a fertilizer maker, instead is engaged in crop protection, with 10% of Rs. 1,300 cr revenue from exports. As of 30.9.25, capital work in progress stood at Rs. 40 cr, which has now been capitalized, for backward integration of intermediates at Saykha, Gujarat.
Flat Topline
In past 3 years, between FY22 to FY25, company’s revenue has growth at only 2% CAGR, from Rs. 1,191 cr to Rs. 1,287 cr. Infact, in FY24, revenue declined 4% YoY.
Margins have also been fluctuating, with EBITDA margin dropping from 12% in FY22 to 7% in FY23 and back to 13% in FY25. Mix of higher-margin technicals has decreased from 41% of revenue in FY23 to 28% of revenue in H1FY26 (other product being formulations). Yet EBITDA margins have doubled from 7% to 16% during this period, which is surprising.
Highly Seasonal Business
Product basket is primarily kharif-dominated, with H1 accounting for ~60% of annual topline and 80%+ annual bottomline. Thus, H2 is quite subdued. In FY25, H1 revenue was at Rs. 703 cr ,while H2 was at Rs. 584 cr. H1FY25 PAT stood at Rs. 66 cr (9% net margin) with H2FY25 PAT at Rs. 15 cr (2% net margin), aggregating to Rs. 81 cr PAT in FY25 (6% net margin).
H1FY26 revenue stood at Rs. 844 cr, with PAT of Rs. 81 cr (9.6% net margin) and EPS of Rs. 21. Given strong seasonality, H1 EPS cannot be annualized.
Fully Priced
After penciling in lower interest outgo but an expanded equity, FY27E EPS is seen at Rs. 22, implying a one-year forward PE multiple of 15x. This is fully priced, for a nano-cap stock, having high working capital requirement of 3.5 months, expected to drop in 18% RoE, to low-teens post equity expansion in IPO and 40% purchases being from China.
Even on a peer comparison, IPO leaves nothing on the table. Some of the peers like Bharat Rasayan with Rs. 1,200 cr topline and 10-11% net margin is trading at a PE of 14x, while fast growing Sharda Cropchem is at 15x, with 10% net margin and Rs. 5,000 cr topline, growing 22% CAGR in past 3 years. Thus, pricing is in-line with industry.
