How was the listing of Paradeep Phosphates on Friday this week?

Paradeep Phosphates, which closed its IPO a week before, got listed on Friday the 27th of May. It must be said that the stock made a fairly decent debut in the markets as its shares got listed at Rs43.55 on the bourses. The IPO price was Rs42. On the day of listing, the stock touched a high price of Rs47.25 but closed the day at Rs44. On the BSE, combined volumes of 56 million shares changed hands.

The subscription for the Rs1,500 crore IPO of Paradeep Phosphates just about scraped through with the issue garnering just 1.75 times subscription. Overall, the retail portion was subscribed 1.37 times, while the HNI / NII portion got just about 0.82 time subscribed. The QIB portion was relatively better off at 3 times subscription at the close of the issue. Paradeep plans to use the funds to bankroll its Goa facility and to prepay borrowings.

The company is part of the Zuari group and manufactures and trades a complete host of complex fertilizers such as DAP, NPK-10, NPK-12 and NP-20. NPK is normally the ratio of Nitrogenous fertilizers, phosphatic fertilizers and Potassium based fertilizers. It is already India’s second largest manufacturer of non-urea DAP. On a post listing basis, the stock is trading at a P/E ratio of 15.3 times FY21 EPS. That is broadly in line with industry peers.

Once the expansion is completed, Paradeep Phosphates will have total fertilizer production capacity of 1.2 million metric tonnes (MT). This would be inclusive of annual granulation capacity of DAP and NPK production plants at 0.80 MT and annual capacity of producing Urea at 0.40 MT. It will also used the funds partially to modernize its facilities.