Paradeep Phosphates Ltd. IPO Snapshot
About the Company
Paradeep Phosphates Ltd. (PPL) is primarily engaged in manufacturing, trading, distribution and sales of a variety of fertilizers such as DAP, three grades of Nitrogen-Phosphorus-Potassium (“NPK”) (namely NPK 10, NPK-12 and NP-20), Zypmite, Phospho-gypsum and Hydroflorosilicic Acid (“HFSA”). It is also engaged in the trading, distribution and sales of Muriate of Potash (“MOP”), Ammonia, Speciality Plant Nutrients (“SPN”) and City compost. PPL’s fertilizers are marketed under key brand names such as ‘Jai Kisaan – Navratna’ and ‘Navratna’. The Company was incorporated in 1981. Zuari Maroc Phosphates Private Limited (“ZMPPL”), a joint venture of Zuari Agro Chemicals Limited (“ZACL”) and OCP Group S.A. (“OCP”), currently holds 80.45% of the equity share capital of the Company, with the balance being held by the Government of India.
PPL distributes products across 14 states in India through various private and institutional channels, as of March 31, 2022. As of the same date, it has set up a network of 11 regional marketing offices and 468 stock points in 14 states across India. Its network comprised 4,761 dealers and over 67,150 retailers, catering to five million estimated farmers in India.
The net proceeds from the IPO will be used for the following purposes –
Objective of the Issue
∙ To part finance its funding needs for part financing acquisition of Goa facility (Rs. 520.00 cr.)
∙ Repayment/Prepayment of certain borrowings (Rs. 300 cr.) ∙ General Corporate Purposes
Risks & Concerns
∙ Dependence on the performance of the agricultural sector.
∙ Business is subject to climatic conditions and is cyclical in nature.
∙ Operates under regulated environment, so any change in government policies could adversely affect our business.
∙ Shutdowns in our manufacturing facility or underutilization of manufacturing capacities could have an adverse effect on the business.
∙ Any delay to acquire the Goa Facility or any acquisition, joint venture or partnership may have an adverse effect on the business.