Dhanlaxmi Crop Science, a technology-driven seeds company, made a stellar debut on the NSE SME platform, listing at Rs 104.50 per share—a 90% premium over its IPO price of Rs 55.
Shortly after the listing, the stock surged further by 4.97% to Rs 109.70, hitting the upper circuit limit. By mid-morning, 1.3 million shares had changed hands, generating a turnover of Rs 13.92 crore before trading was halted.
Record IPO Subscription
The Rs 23.80-crore IPO, which closed on December 11, 2024, witnessed overwhelming demand, oversubscribed 555 times. The issue comprised 43.28 lakh fresh equity shares, priced between Rs 52 and Rs 55, with a minimum lot size of 2,000 shares.
Investor Participation Breakdown
- Retail Investors: Oversubscribed by 441.18 times.
- Non-Institutional Investors (NIIs): Oversubscribed by 1,241.27 times.
- Qualified Institutional Buyers (QIBs): Oversubscribed by 197.65 times.
This extraordinary demand demonstrated investors’ strong confidence in the company’s future growth.
Grey Market Sentiment
Before listing, Dhanlaxmi Crop Science shares were trading at Rs 105 in the grey market, reflecting a premium of 90.91%. While the grey market premium aligned closely with the listing price, it is important to note that GMP is an unregulated indicator and does not reflect official market trends.
Regulatory Cap and Investor Protection
The NSE SME imposes a 90% cap on listing gains for SME IPOs to safeguard against excessive volatility. Despite this cap, Dhanlaxmi Crop Science shares quickly gained momentum, hitting the upper circuit shortly after listing.
Promoter Stake and Strategic Anchor Investment
The IPO’s fresh issuance reduced the promoter stake from 76.7% to 56.3%. This balanced equity distribution maintains promoter control while welcoming new investors.
The company raised Rs 6.37 crore from anchor investors on December 6, 2024, further strengthening market confidence in the IPO.
Financial Highlights
Dhanlaxmi Crop Science reported impressive growth between FY 2023 and FY 2024:
- Revenue: Increased by 37%.
- Profit After Tax (PAT): Surged by 55%.
The company’s flagship product, cotton seeds, significantly contributed to operating profits, accounting for:
- 76.78% in FY 2024.
- 71.47% in FY 2023.
- 64.73% in FY 2022.
Diversified Operations and Market Presence
The company’s portfolio spans 24 crops and vegetables, supported by operations in five Indian states. By integrating traditional breeding methods with biotechnology, Dhanlaxmi Crop Science addresses the growing demand for high-yield, pest-resistant seeds.
Strategic Use of IPO Proceeds
According to the company’s Red Herring Prospectus (RHP), the IPO proceeds will be allocated as follows:
- Meeting working capital requirements.
- Covering IPO-related expenses.
- Supporting general corporate purposes.
This allocation highlights the company’s focus on sustaining growth and strengthening its financial position.
Stakeholders and Market Makers
- Market Maker: Mnm Stock Broking Private Limited ensured liquidity during the initial trading phase.
- Lead Manager: Finshore Management Services handled the IPO process seamlessly.
- Registrar: Bigshare Services facilitated the smooth allotment of shares.
Company Overview
Founded in 2005, Dhanlaxmi Crop Science specializes in developing, producing, and selling high-quality seeds for field crops and vegetables. The company’s innovation-driven approach has established it as a key player in the Indian agricultural sector.
Disclaimer – This article is for informational purposes only and does not constitute financial advice. MarketScope Daily does not endorse or recommend any investment in Dhanlaxmi Crop Science or its IPO. Readers should consult SEBI-registered advisors and perform their own due diligence before making investment decisions. Grey market premiums mentioned in the article are based on informal market sentiment and are not SEBI-regulated indicators.
