These views were expressed by Rajkumar Gupta, MD of Agro Phos (India) Ltd.
Agro Phos (India) Ltd is a city-based fertilizer manufacturing company which made a debut on ‘Emerge’ platform of NSE on November 16, this year. Its share was listed at 20% higher than its initial public offering (IPO) price.
IPO of Agro Phos India Limited received overwhelming response from both retail and non-retail segment, i.e. approximately 10,000 applications resulting in maximum number of applications and over-subscription of more than17 times ever received in the SME segment. The company garnered more than Rs 225 crore. The company came out with its Initial Public Offering of Rs 1293.60 lakh at issue price of Rs 22 per share. The issue constituted 29.00% of the post IPO paid up equity share capital of the Company.
Q: Tell us something about Agro Phos?
A: It was set up in 2002 as M/s Agro Phos India Limited, manufacturing fertilisers such as single super phosphate, nitrogen phosphate and potassium, zinc sulphate, organic manure and calcium sulphate commonly known as soil conditioner or gypsum.
Q: What Kind of challenges an SME unit faces while planning to bring out an IPO?
A: For a SME entrepreneur this is new thing. Lack of knowledge also plays its part. I started preparations for entering primary market about two years ago. SME unit must have strong financial condition. Minimum 25% holding must be in the hands of outsiders. We have diluted 29% stake. So according to need, we improved our financial position. An SME has to improve its unit governance, which includes proper records of expenditures like unit’s contribution in EPFO, ESIC etc. We opted TCS iON, clouds based solution offering company which offers services to SMEs. It is a strategic unit of Tata Consultancy Services (TCS) focused on educational institutions and manufacturing industries. It serves its clients with help of best practices gained through TCS’ global experience, domestic market reach, skills, and delivery capabilities. A company has to improve its balance sheet, so a company is eligible to bring out an IPO.
Q: What kind of benefit a unit enjoys if it brings out IPO?
A: See there is over 2.50 lakh registered SME units in India and only about 150 are listed ones. Primarily, a company improves its own credibility in the SME world and bankers. If a unit wants to excel its present level then it has to venture into capital market.
Q: How govt can help an IPO aspiring company?
A: There is lack of awareness among SME units for bringing out IPO. As I told you that out of 2.5 lakh registered SMEs only 150 have succeeded in entering the capital market. This figures shows that there is lack of awareness among the SMEs. So, the government should take effort for promotion of IPOs. For example, to convince farmers we went to villages with officers of the agriculture department to educate them about what type of fertilizer should be used. Thousands of SMEs are in MP. The state government should organised seminars on the theme of promoting companies for bringing IPOs. Thousands of SME units are in Indore, Pithampur and nearby areas, thus officers of the Industry Department and the DIC should workout for the same.
Source: freepressjournal