Courtesy: https://www.chittorgarh.com/
Review By Dilip Davda on July 12, 2025
- The company is engaged in agro chemicals manufacturing and marketing.
• For the last two fiscals, it posted degrowth in top and bottom lines.
• Losses widen from Rs. 46.89 cr. of FY24 to Rs. 134.71 cr. for FY25.
• The RI is aggressively priced, making it a highly risky bet.
• Investors may skip this costly RI of loss-making company.
ABOUT COMPANY:
Astec Lifesciences Ltd. (ALL) owns and operates agro-chemicals manufacturing facilities, all of which are located in Mahad, Maharashtra. In the event of non-materialization of its estimates and expected order flow for existing and / or future products and / or failure of optimum utilization of capacities, due to factors including adverse economic scenario, change in demand or for any other reason, its capacities may not be fully utilized thereby impairing ability to fully absorb fixed cost and may adversely impact its consolidated financial performance.
The industry in which ALL operates has been affected by various factors, such as, declining agrochemical prices, regulatory actions in certain countries related to ban on certain products, crop commodity prices, higher inventories and unfavorable climatic conditions, which are beyond the control of the Company. These factors have impacted its financial performance in the past and may continue to do so in future. Further, industry has also been affected by increase in production capacity and supplies from the PRC, as such increase has led to higher supply and lesser demand of the products that it manufactures. Consequently, some of its competitors may be able to provide similar or equivalent products at lower costs than it can provide. Accordingly, the company may not be able to compete effectively with competitors or may be required to reduce margins to remain competitive, which may have an adverse effect on business, financial condition, results of operations and cash flows.
ALL’s product portfolio includes patented and post-patent agrochemical products including crop protection products such as, triazole fungicides and herbicides (collectively, the “Products”). It imports a substantial number of raw materials from outside India. Any restrictions, either from the Central or state governments of India, or from countries which it imports from, on such imports may adversely affect business, prospects, financial condition and results of operations. Some of its raw material imports are regulated by the Manufacture, Storage and Import of Hazardous Chemical Rules, 1989 that, inter alia, allows the concerned authority to direct safety measures if it deems that the chemicals proposed to be imported may cause major accidents or stop an import of chemicals based on safety and environmental considerations. There can be no assurance that such regulations would not be made more stringent which would consequently restrict our ability to import raw materials from other jurisdictions. Further, there can be no assurance that, under these circumstances, it will be successful in identifying alternate suppliers for raw materials or it will be able to source the raw materials at favorable terms in a timely manner. Any restriction on import of raw materials could have an adverse effect on ALL’s ability to deliver products to customers, business and results of operations. As of March 31, 2025, it had 575 employees on its payroll and additional 553 contract worker in various departments.
ISSUE DETAILS:
The company is coming out with its Rights Issue (RI) of 2801673 equity shares of Rs. 10 each at a fixed price of Rs. 890 per share to mobilize Rs. 249.35 cr. The RI is opening for subscription on July 14, 2025, and will close on July 28, 2025. The company is offering RI in the ratio of 1 for 7 to its eligible stakeholders as of the record date of July 04, 2025.
The company is asking for full money on application for the number of shares applied. Post allotment, shares will be listed on BSE and NSE. The company is spending Rs. 1.00 cr. for this RI process, and from the net proceeds, it will utilize Rs. 102.00 cr. for repayment/prepayment of certain borrowings, Rs. 145.00 cr. for full repayment of redemption dues of commercial papers issued, and Rs. 1.35 cr. for general corporate purposes.
The RI is self-managed by the company itself, and MUFG Intime India Pvt. Ltd. is the registrar to the issue. While Bigshare Services Pvt. Ltd. is the registrar to the company.
Post RI, company’s current paid-up equity capital of Rs. 19.61 cr. will stand enhanced to Rs. 22.41cr. Based on the RI pricing, the company is looking for a market cap of Rs. 1994.79 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, it has posted a total revenue/ net profit/ – (loss), of Rs. Rs. 458.18 cr. / Rs. – (46.89) cr. (FY24), Rs. 381.30 cr. / Rs. – (134.71) cr. (FY25). Its NAV is down to Rs. 119.70 as of March 31, 2025, against Rs. 188.32 as of March 31, 2024.
DIVIDEND POLICY:
The company has declared a dividend of 15% for the last four fiscals i.e., FY20, FY21, FY22 and FY24. It will adopt a prudent dividend policy, based on its financial performance and future prospects.
SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 533138 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 944.70 on July 03, 2025, and opened on an ex-right basis at Rs. 930.30 on July 04, 2025. Since then, it has marked a high/low of Rs. 979.05 / Rs. 890.00. The scrip last closed at Rs. 893.40 as of July 11, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 1365.03 / Rs. 631.50.
The promoters’ holding has inched up around 70.87% for the last quarter ended with March 31, 2025, against 66.75% for previous two quarters ended with December 31, 2024. The counter is currently trading just around RI price.
Conclusion / Investment Strategy
ALL is engaged in agro chemicals manufacturing and marketing. For the last two fiscals, it posted degrowth in top and bottom lines. Losses widen from Rs. 46.89 cr. of FY24 to Rs. 134.71 cr. for FY25. The RI is aggressively priced, making it a highly risky bet. The company is operating in a highly competitive and fragmented segment. Investors may skip this costly RI of loss-making company.
Review By Dilip Davda on July 12, 2025
Review Author
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detailed fundamental and financial analysis of companies coming up with IPOs helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
Courtesy: https://www.chittorgarh.com/
