Nova Agritech IPO: Here are key risk factors to know before you subscribe to the issue

The agri-tech company aims to raise ₹143.81 crore from its initial offer, out of which ₹112 crore is expected via issuance of fresh shares. The remaining ₹31.81 crore is reserved for offer for sale (OFS).

Also read: Nova AgriTech IPO opens today: Latest GMP, price, date, 10 essential details to know about the IPO

The company had raised ₹43.14 crore from anchor investors a day before it opened for subscription.

Keynote Financial Services Ltd and Bajaj Capital Limited are the book running lead managers of the Nova AgriTech IPO, while Bigshare Services Pvt Ltd is the registrar for the issue.

Nova AgriTech IPO offers 35,075,205 shares, 7,015,139 (20.00%) to QIB, 5,261,354 (15.00%) to NII, 12,276,492 (35.00%) to RII and 10,522,220 (30.00%) to Anchor investors. 33,634 RIIs will receive minimum 365 shares and 343 (sNII) and 686 (bNII) will receive minimum 5,110 shares. (in case of oversubscription).

Also read: Nova Agritech IPO: Issue fully subscribed as day 1 sees rush from NIIs, retail investors; GMP steady

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Here are key risk factors to consider to before applying to the issue –

1. The company had negative cash flow during certain fiscal years. Sustained negative cash flow could adversely impact our business, financial condition and results of operations.
2. It is required to obtain and maintain various licences and permits for our business.
3. Any default in payment by the dealers or delay in realising the receivables may have an adverse effect on our business and financial operation.
4. The company have significant working capital requirements and may require additional capital and financing in the future. Our ability to access capital at attractive costs also depends on our credit ratings. Our operations could be curtailed if we are unable to obtain required additional capital and financing when needed.
5. Any change in Government policies towards the agriculture sector or a reduction in subsidies and incentives provided to farmers could adversely affect its business and results of operations.
6. The company may not be able to protect our trademarks from infringement.
7. If we are unable to effectively manage or expand its dealer network and operations or pursue growth strategy and maintain healthy relations with existing dealers, the sales may be affected and it may not achieve its expected levels of profitability which may adversely affect its business prospects, financial condition and results of operations.
8. The company, its subsidiaries, promoters and directors are involved in certain legal proceedings and potential litigation. Any adverse decision in such proceedings may render the company liable to liabilities/penalties and may adversely affect its business and results of operations.
9. The agreements governing the company’s indebtedness contain conditions and restrictions on its operations, additional financing and capital structure.

10. We have contingent liabilities which could materially and adversely affect our business, results of operations and financial condition.

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Published: 23 Jan 2024, 10:19 PM IST