K.P.R. Agrochem, an agri-input company IPO was withdrawn a day before issue opens for unknown reasons. The proposed IPO size was Rs. 283.2 crore which included fresh issue of ? 210 crore and offer for sale of 1.2 crore shares in the price band of Rs. 59-61. Retail & eligible employees were offered discount of Rs. 3 per share. At least 40% of the issue was reserved for retail individual, while not less than 35% was reserved for non-Institutional and up to 25% of the issue was for QIBs.
Out of the fresh issue of Rs. 210 crore the Company planned to utilize Rs. 30 crore towards debt repayment while Rs. 120 crore was proposed to be utilized to meet additional working capital requirements. Balance amount would have been utilized to meet issue and general corporate expenses. PL Capital Markets, part of Prabhudas Lilladher group was the book running lead manager for the issue.
K.P.R. Agrochem was priced at a premium as compare to peers such as Chambal Fertilizers and Deepak Fertilizers and Petrochemicals. The Company, Promoters and Directors are also involved in various legal proceedings. Revenue and profits were largely stagnant for the past few years. K.P.R Agrochem group entities have also defaulted on payment of loans. K.P.R. Agrochem business is highly dependent on south India and the water crisis in the Southern part of India dose not bode well for the prospects of the company. Considering all these factors, we were neutral on the prospects of the company.