Grey Market Premium, Kostak, Expected Listing Price : Sharda Crop Chem, Snowman Logistics

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Issue Name	Price Band	Grey Market Premium	Listing Price	Kostak Price
				(Minimum Application)
Snowman Logistics	Rs 47	23-24	Rs 70	--
Sharda Crop Chem	Rs. 145 to 156	54 to 55	Rs 200	850 to 900
				(Bid Lot Min. : 90 Shares)

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

Sharda Cropchem IPO opens tomorrow (Friday): Should you subscribe? : moneycontrol

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The Rs 352-crore public offer of Sharda Cropchem, the Mumbai-based crop protection chemical company, is set to open for subscription on September 5 and will close on September 9.

The issue price is fixed at Rs 145-156 a share. The company won’t get money raised through this issue as purpose of the public issue is to carry out sale of 2,25,55,124 equity shares by selling shareholders (HEP Mauritius, Ramprakash V Bubna and Sharda R Bubna) and achieve the benefits of listing equity shares on exchanges - BSE and NSE.

Bubna family, the promoter and promoter group, will reduce their stake in the company from 84.13 percent currently to 75 percent and non-institutional investor HEP Mauritius will offload its entire stake of 15.87 percent.

Sharda Cropchem is a crop protection chemical company engaged in the marketing and distribution of a wide range of formulations and generic active ingredients globally. It is also involved in order based procurement and supply of belts, general chemicals, dyes and dye intermediates.

So, should you subscribe?

Brokerages advise subscribing the issue, citing reasonable valuations, asset-light business model with core competence in registration of ingredients and healthy balance sheet.

“The company with its asset light business model, core competency in seeking registrations, global distribution network and diversified portfolio is looking attractive investment opportunity,” said Hem Securities.

Why should you subscribe?

Asset-light business model, core competency, global distribution network

Sharda has an asset-light business model whereby it focuses on identifying generic molecules, preparing dossiers, seeking registrations, marketing and distributing formulations or generic active ingredients in fungicide, herbicide and insecticide segments through third-party distributors or its own sales force.

The company as of FY14 holds around 1200 registrations of which the European Union constitutes around 45 percent (534 registrations), Latin America around 26 percent (312 registrations), NAFTA around 6 percent while the rest of world (RoW) comprises the remaining around 23 percent.

As of August 5, 2014, SCL has filed over 500 applications for registrations globally which are pending at different stages.

With an objective to increase its presence in the agrochemical value chain, the company has set up its own sales force in various countries in Europe as well as in Mexico, Colombia, South Africa and India. As of date it has over 440 third-party distributors and over 100 personnel in its own sales force.

According to WealthRays, pending registrations and its expansion in sales force to reduce dependency on third party are keys on sustaining and strengthening its strong financials. Recent entry into biocide segment is also positive for the company, it added.

The company has recently entered into the biocide segment and has acquired several registrations from the existing registration holders, primarily, in Europe.

Strong sourcing capabilities, strong geographic spread and diversified portfolio

The availability of multiple manufacturers and formulators in the agrochemical industry helps the company in not being dependent on a single or limited number of manufacturers or formulators.

Agrochemical business operations of the company are spread in over 60 countries across Europe, NAFTA, Latin America and Rest of the World.

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

Next IPOs: Sharda (5th Sep) , Shemaroo (15th/ 16th Sep), Monte Carlo( 22nd Sep)

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After Sharda Cropchem
Opens 5th Sep
Closes 9th Sep

Next IPOs are:

Shemaroo Entertainment IPO
Rs 150 Cr IPO
Opens on 15th or 16th Sep (tentative)

Then, we will have

Monte Carlo
Opens on 22nd Sep (tentative)


�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

IPO- Sharda Cropchem Ltd : Subscribe for listing gains: ICICI Securities

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Subscribe for listing gains…
Sharda Cropchem (Sharda) is a crop protection chemical company
engaged in the marketing and distribution of a wide range of formulations
and generic active ingredients globally. It is also involved in order based
procurement and supply of belts, general chemicals, dyes and dye
intermediates. The topline and bottomline have grown at a CAGR of
22.1% and 38.6%, respectively, in FY10-14. In FY14, the company clocked
a consolidated topline of | 782 crore with ~82.5% being contributed by
the agro chemical business (| 645 crore), ~15.8% being contributed by
the conveyor belt business (| 123 crore) and ~1.7% being contributed by
other business (dyes). The company is export-oriented and realises a
healthy 97% of its topline from exports. Among geographies, it has major
exposure to the European Union, which constitutes ~61.3% of its FY14
consolidated revenue.
Investment Rationale
High number of registrations- key USP
Sharda has an asset-light business model whereby it focuses on
identifying generic molecules, preparing dossiers, seeking registrations,
marketing and distributing formulations through third-party distributors or
its own sales force. The company as of FY14 holds around 1200
registrations of which the European Union constitutes ~45% (534
registrations), Latin America ~26% (312 registrations), Nafta ~6% while
the rest of world (RoW) comprises the remaining ~23%.
Asset light model; healthy balance sheet coupled with good return ratios
By virtue of following an asset light model, Sharda has a healthy balance
sheet with debt-equity at 0.1x FY14. As of FY14, the company holds
~| 197 crore of fixed assets comprising | 62 crore of intangible assets
(registrations) and | 134 crore of intangible assets under development
(registrations in various stages of development). The company has a net
cash of | 151 crore as of FY14. Sharda also commands healthy return
ratios with RoE and RoCE of 20.9% and 21.1%, respectively, in FY14.
Concerns
• Stretched working capital cycle (~90+ days)
• Company’s trademark not registered
• Growth of GM crops limiting growth of agro chemicals
Available at 13.2x FY14 P/E & 2.5x FY14 P/BV; recommend SUBSCRIBE
At the upper price band of | 156, the company is available at a P/E of
13.2x on FY14 EPS. We reiterate that this issue is essentially an offer for
sale wherein no proceeds from the issue will be ploughed back in the
company. We recommend SUBSCRIBE on the issue for listing gains.



�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

IPOs in September: Sharda (5th Sep) , Shemaroo Entertainment (15th/ 16th Sep), Monte Carlo( end of Sep)

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After Sharda Cropchem,

Next IPOs are:

Shemaroo Entertainment IPO
Rs 150 Cr IPO
Opens on 15th or 16th Sep

Then, we will have

Monte Carlo
around end of Sep


�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��