Dharmaj Crop Guard IPO: GMP jumps ahead of issue opening date. Apply or not?

Dharmaj Crop Guard IPO GMP today

Market observers said that Dharmaj Crop Guard IPO grey market premium (GMP) today is ₹60, which is ₹5 higher from its yesterday’s GMP of ₹55. They said that positive sentiments on Dalal Street and company’s growth record, the grey market premium may further rise as the public issue is expected to gain strong response from investors. They said that in last three days, Dharmaj Crop Guard IPO GMP has surged from ₹35 to ₹60 levels, which is praiseworthy as the issue is yet to hit primary markets.

What this GMP means?

Grey market observers said that Dharmaj Crop Guard IPO GMP today is ₹60, which means grey market is expecting Dharmaj Crop Guard IPO listing at around ₹297, which is around 25 per cent higher from the upper price band of the issue price.

Dharmaj Crop Guard IPO: Apply or not?

Speaking on Dharmaj Crop Guard IPO, Abhay Doshi, Founder at UnlistedArena.com said, “Dharmaj Crop Guard is an agrochemical company engaged in the business of manufacturing, distributing, and marketing a wide range of agrochemical formulations. The company has a diverse set of products with customers across domestic as well as international markets. The operations look relatively small compared to its peers, however, revenues, EBITDA & margins are on the rise. At the upper band, post-fresh issue, the asking p/e post fresh issue comes around 27.8x based on FY22 earnings. However, given the growth and small issue size, huge demand is anticipated for the issue.”

Giving ‘subscribe’ tag to Dharmaj Crop Guard IPO, Swastika Investmart research report says, “The upward momentum in pesticide industry output is expected to continue going forward, backed by a growth in food consumption in the domestic market amid an expected increase in population, government support for agriculture, demand from export markets, and the horticulture and floriculture markets, among others.”

Swastika Investmart report went on to add that the government’s aim to reduce dependency on China and improve self sufficiency is expected to support industry’s backward integration and thus its growth. DGCL has been able to develop strong distribution channels and a stable, diversified product portfolio.

“The issue is priced at 20 PE of FY22 earnings, which is lower than most of its listed peers, and the company has posted steady growth in both revenue and profit. Profit margins are also rising continuously in a tough environment, so we assign a “Subscribe” rating to this IPO.” Swastika Investmart report concluded.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.