Parijat Industries (India) Limited IPO

01At a glance

What the company does: develops, makes and distributes agrochemical formulations, insecticides, fungicides, bactericides, herbicides and combinations, plus specialty fertilisers, biostimulants and plant growth regulators, and technical-grade active ingredients used to make formulations (DRHP p.28).

Who pays it: dealers and customers in India, 71.30% of FY25 revenue, and overseas buyers, 28.33% (DRHP p.146). The top ten customers were only 19.04% of FY25 revenue (DRHP p.57).

Why it is raising money: ₹1,216.00 million to repay borrowings, including accrued interest, and the rest for general purposes (DRHP p.29).

How fast it has grown: revenue of ₹10,285 million in FY23, ₹9,498 million in FY24 and ₹10,453 million in FY25 (DRHP p.32).

The one thing to understand: a mid-sized, indebted agrochemical maker where the largest single seller is an outside investor. India Agri Business Fund II holds 30.78% fully diluted and offers 14,600,000 shares, while net debt was 1.98 times EBITDA at March 2025 (DRHP p.29, DRHP p.30, DRHP p.146).

02The business, in plain words

An agrochemical company buys or makes active ingredients, mixes them into branded sprays and granules, and sells them through distributors and dealers to farmers; it also exports formulations and technicals.

A farmer's cotton crop is attacked by pests → the farmer asks a local dealer for an insecticide → the dealer stocks Parijat's branded product through the company's distribution network → the company is paid on agreed terms.

Earnings equation: Profit ≈ litres and kilograms sold × (price − active ingredient and formulation cost) − distribution cost − interest. Gross margin was 35.46% and EBITDA margin 12.40% in FY25 (DRHP p.146).

03Where the money comes from

Source: DRHP p.57, DRHP p.146, DRHP p.242.

04The growth record

Source: DRHP p.32, DRHP p.80, DRHP p.146.

05What the growth is made of

Margin recovery rather than volume. Revenue fell 7.65% in FY24 and rose 10.06% in FY25, while gross margin rose from 27.63% in FY23 to 35.46% (DRHP p.146). Exports of formulations fell from ₹3,622 million in FY23 to ₹2,517 million in FY25 as domestic sales grew (DRHP p.242).

06Earnings quality

Operating cash flow over FY23 to FY25 was ₹345.52 million against profit of ₹1,062.63 million, with outflows in FY23 and FY24 and an inflow in FY25 (our arithmetic, DRHP p.32, DRHP p.80). Contingent liabilities at March 2025 included ₹60.79 million of disputed tax and ₹23.07 million of claims not acknowledged as debts (DRHP p.81). Other income was ₹170.72 million in FY25 (DRHP p.468) against restated profit before tax of ₹729.70 million (DRHP p.472). Trade receivables were 117.88 days of revenue in FY24 and 143.11 days in FY25 (DRHP p.59).

07The balance sheet

Source: DRHP p.32, DRHP p.146. Return on capital employed was 21.06% in FY25 (DRHP p.146).

08What the money is for

Source: DRHP p.29. A pre-IPO placement of up to ₹320 million may be made before the RHP (DRHP p.29). The use of proceeds will not be monitored by a monitoring agency (DRHP p.82).

09Who is selling

Source: DRHP p.29, DRHP p.30. The last row covers Vikram Anand, Sanya Anand, Viraj Anand and Harshi Anand, and is our arithmetic; Harshi Anand's holding is negligible. India Agri Business Fund II's average cost is ₹45.16 a share (DRHP p.42).

The fresh issue is up to ₹1,600.00 million and the offer for sale 20,370,680 shares (DRHP p.110). Of the other sellers, Vikram Anand (promoter) offers up to 554,000 shares, Sanya Anand and Viraj Anand (promoter group) up to 323,000 each, and Harshi Anand (promoter group) up to 1,800 (DRHP p.29, DRHP p.30).

10Promoters

The promoters are Keshav Anand, Sharat Anand, Vikram Anand, Uday Raj Anand and Shivraj Anand, who hold 31.05% on a fully diluted basis; promoter-group members, mostly family trusts, hold a further 33.86% (DRHP p.30). The document discloses a regulatory action, a show-cause notice from the Additional Director General of Foreign Trade, Ahmedabad, against the company, directors and promoters, and a defamation suit by Agrow Allied Ventures against the company and Keshav Anand (DRHP p.34). Remuneration to the five promoters was ₹31.85 million in FY23 and ₹32.07 million in FY25 (our arithmetic, DRHP p.36).

11Who already owns it

Source: DRHP p.30. The last row is our arithmetic.

12What changed just before the IPO

• Share split: ₹10 shares split into two ₹5 shares in June 2025 (DRHP p.33).
• Margins: EBITDA margin up from 7.84% to 12.40% in FY25 (DRHP p.146).
• Cash: operating cash flow turned positive in FY25 (DRHP p.80).
• Public company: converted into a public limited company, with a fresh certificate of incorporation dated 8 July 2025 (DRHP p.3).
• Auditor: no change of statutory auditor in the three years before the DRHP (DRHP p.105).

13Capacity and expansion

Manufacturing units' capacity is certified by an independent chartered engineer (DRHP p.79). The proceeds repay debt; no new capacity is funded (DRHP p.29).

14Market size and industry structure

The CRISIL report cited in the offer document says India is the fourth-largest agrochemical producer and third-largest exporter of crop-protection chemicals, with exports of about ₹350 billion in FY2024, and expects the domestic crop-protection industry to grow 5 to 6% a year from FY2025 to FY2028 (DRHP p.28). Those projections are CRISIL's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• Branded products and a broad range across crop protection and nutrition (DRHP p.28).
• A spread customer base: ten customers are under a fifth of revenue (DRHP p.57).

Against that: weather-dependent demand, working capital, debt, counterfeit products, and a large volume of litigation (DRHP p.78, DRHP p.83).

16Peers the company named

Source: DRHP p.149. The peers' P/E ranges from 23.78 to 59.19, average 44.34 (DRHP p.145).

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Debt. Net debt nearly twice EBITDA (DRHP p.146).
• Cash. Negative operating cash flow in FY23 and FY24 (DRHP p.80).
• Exports. International revenue has fallen from 38% to 28% (DRHP p.146).
• Counterfeits. Fake products under its brands (DRHP p.83).
• Litigation. Hundreds of pending cases (DRHP p.78).

18Litigation and regulatory matters

Source: DRHP p.33. The 601 criminal proceedings listed as filed by the company include 597 cheque-dishonour complaints under the Negotiable Instruments Act; the footnote describes these as filed "against our Company", which does not match the table heading (DRHP p.33, DRHP p.78). A misbranding complaint under the Insecticides Act is pending against the company and its subsidiary Leeds Life Sciences (DRHP p.34).

19Related-party transactions

Related-party transactions outside the group were 1.42% of FY25 revenue (DRHP p.77).

20What the offer document does not say

In the sections read for this study, the document does not give:

• Whether the 597 cheque cases were filed by or against the company, given the conflicting wording (DRHP p.33).
• What the DGFT show-cause notice alleges, in the pages read.
• Why export formulations fell by ₹1.1 billion from FY23 to FY25, in the pages read.
• How much debt will remain after the repayment, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. Were the 597 cheque-dishonour cases filed by the company, against whom, and for how much?
2. What does the foreign-trade show-cause notice concern?
3. Why did export sales of formulations fall by about a third?
4. What drove the FY25 rise in gross margin, and is it tied to raw-material prices?
5. Why is India Agri Business Fund II selling most of the offered shares now?

1Sources and cited facts

This study was read from 1 document the company filed. The 63 figures it cites are listed under the document each came from, with the page and the sentence as printed.