Heranba Industries Limited IPO review

Heranba is a Gujarat based crop protection chemical manufacturer and exporter of Intermediaries, Technicals and Formulations. The company’s IPO opens on Feb 23rd, 2021. Heranba is one of the leading domestic producers of synthetic pyrethroids in India. Below are company’s five business verticals:

  1. Domestic institutional sales of technicals – manufacture and sale of technicals in bulk to domestic companies
  2. Technicals exports – deals with exports in bulk to customers outside India
  3. Branded formulations – manufacture and sale of formulations under its brand through the company’s distribution network in India
  4. Formulation exports – sale of formulations in bulk and customer-specific packaging outside India; and,
  5. Public health – manufacture and sale of general insect control chemicals by participating in public health tenders issued by governmental authorities. Also engages into selling to pest manufacturing companies

Technicals contribute to over 60% of revenue for the company, followed by formulations. Below is the revenue split for the 6-months ending September 2020.

Heranba Industries Limited - Segmental revenue

The company exported to more than sixty countries across Latin America, CIS, Middle East, Africa, Asia and South East Asia in Fiscal 2020.

Scale-up of the manufacturing capacity

Currently, the company is present in the agrochemicals industry’s entire product value chain. It holds registrations for 18 technicals, 103 technicals and formulations, and 169 formulations.Heranba Industries Limited - scale up of manufacturing facilities


Mr Sadashiv K. Shetty and Raghuram K. Shetty are first-generation entrepreneurs. The promoters have over three decades of experience in the agrochemicals industry.

Key strengths:

  1. Crop protection chemical manufacturer with existence for the past three decades
  2. Extensive distribution network in India with 9,400+ dealers across 16 states and one union territory
  3. Three manufacturing and packaging facility in Vapi, Gujarat, with an aggregate annual manufacturing capacity of 14,024 metric tonnes
  4. Presence across the wide range of products across the value chain of synthetic pyrethroids
  5. Product registration in the international and local markets enabling global reach

Amount in Rs Cr excluding per share dataHeranba Industries Limited - Condensed financials

  • Growing revenues and healthy margins
  • Strong return on net worth

Offer proceeds

Particulars Amount
Fresh issue of shares Rs 60 Cr
Offer for sale of 90,15,000 eq. shares Rs 565 Cr
Gross issue size Rs 625 Cr

 Usage of the offer proceeds:

  • Fund working capital requirements
  • General corporate expenses

IPO Factsheet

Heranba Industries Limited - IPO factsheet

Conclusion thoughts:

  • Agricultural consumption is ever-increasing in India. To improve the farm productivity, farmers use pesticides to protect crops, and that leads to an increasing trend of agrochemicals usage in India
  • India’s pyrethroids market is experiencing positive growth as these are cost-effective alternatives to conventionally used pesticides. We expect demand for pyrethroids to remain strong in future
  • A crop protection chemical manufacturer and exporter, Heranba is one of the leading domestic producer of synthetic pyrethroids in India
  • Experienced first-generation entrepreneur promoters operating in the sector for the last three decades
  • An extensive distribution network across India
  • Business is susceptible to seasonal fluctuations, and climatic variations and domestic demand is reliant on monsoons
  • The company operates in a competitive and highly fragmented Indian agrochemicals sector. To consistently maintaining the market share can be a challenge


The information provided in the red herring prospectus filed by the company with the Securities and Exchange Board of India (www.sebi.gov.in) is the basis for this note. However, I recommend that the reader validate the data before making any financial decision. Also, investment in an initial public offering (IPO) is subject to market risks. It should be evaluated, keeping your risk profile and investment objective in mind. The author will not be responsible for any financial loss or otherwise resulting from any action taken based on the above.

The author is a senior finance professional with over fifteen years of work experience in corporate finance and has an affinity for personal finance and investment management. Please leave your comment or share thoughts on this article via email at decodefinance.in@gmail.com. For more articles, please visit the website www.decodefinance.in


The author has used his knowledge, experience, and understanding of the subject to write this article. Any views, opinions, and thoughts mentioned in the article belong solely to the author and not necessarily to the author’s employer (past or current), organization, committee, or other group or individual.

Under no circumstances shall the author be liable for any views or analysis expressed in this note. Further, the opinions expressed are not binding on any authority or Court. We advise readers to consult their financial advisor for assistance in their specific case.

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