Indogulf Cropsciences IPO: A Fertile Opportunity for Retail Investors?

The Rs 200 crore public issue opens June 26 with a price band of Rs 105–Rs 111. Here’s what retail investors should know before bidding

About the Issue:  

Indogulf Cropsciences Ltd, a Delhi-based agrochemical company, is hitting the market with its Rs 200 crore IPO, open for subscription from June 26 to June 30, 2025. The company, founded in 1993, makes crop protection products, plant nutrients, and biologicals—key inputs for Indian farmers. It operates four manufacturing units across Haryana and Jammu & Kashmir and serves both domestic and export markets.

In FY24, over 91 per cent of its revenue came from crop protection products, showing strong demand in this segment. The company earns about 52 per cent of its sales from retail (B2C) customers, which indicates a strong brand presence among farmers. With a price band of Rs 105–Rs 111 per share and a minimum retail investment of Rs 14,175, the IPO offers a chance to invest in India’s growing agri-input space. For safer allotment, investors are advised to apply at the cutoff price, bringing the amount to Rs 14,985.

The company has already raised Rs 58.2 crore from anchor investors, with prominent investor Sunil Singhania’s Abakkus Fund picking up nearly half the allocation, signalling institutional confidence. Proceeds from the IPO will be used for working capital, debt reduction, and a new manufacturing plant, which may help improve future margins and growth. Listing is expected on July 3, 2025, on both BSE and NSE. Systematix Corporate Services Limited is acting as the sole book-running lead manager for the Indogulf Cropsciences IPO, while Bigshare Services Pvt Ltd has been appointed as the registrar to the issue.

See the issue details below.

Objects of the Issue

Indogulf Cropsciences plans to utilise the net proceeds from its IPO towards key business objectives, including Rs 65 crore for meeting working capital requirements, Rs 34.12 crore for repayment or prepayment of certain outstanding borrowings, Rs 14 crore for capital expenditure towards setting up an in-house dry flowable (DF) plant at Barwasni in Sonipat, Haryana, and the remaining amount for general corporate purposes.

Promoter

Om Prakash Aggarwal, Sanjay Aggarwal, Anshu Aggarwal, and Arnav Aggarwal are the promoters of Indogulf Cropsciences. Collectively, the promoter group held a 96.86 per cent stake in the company before the IPO.

Company Profile

Incorporated in 1993, Indogulf Cropsciences Limited (ICL) is a Delhi-based agrochemical company engaged in the manufacturing of crop protection products, plant nutrients, and biologicals. The company caters to a wide variety of crops, including cereals, pulses, oilseeds, fibre crops, plantations, fruits, and vegetables. With a strong emphasis on innovation, ICL was among the first indigenous manufacturers of Pyrazosulfuron Ethyl (97 per cent purity) and Spiromesifen technical (96.5 per cent purity) in India.

ICL operates four manufacturing units located in Samba (Jammu & Kashmir) and Nathupur and Barwasni (Haryana), spread across 20 acres. These ISO-certified plants produce a broad array of agrochemical formulations like WDG, SC, CS, ULV, EW, SG, and FS in powder, granular, and liquid forms. The company boasts a strong domestic presence across 22 states and 3 Union Territories, with over 5,700 distributors and has expanded globally, exporting to 34 countries. Its subsidiaries in Australia and India help in registration and market expansion, respectively. ICL has also been recognised as a ‘Two Star Export House’ by the Government of India.

The product portfolio spans three key verticals:

• Crop Protection: This is the company’s core revenue driver (over 90 per cent of FY24 revenue), comprising insecticides, herbicides, fungicides, and bio-stimulants to protect crops from pests and diseases.
• Plant Nutrients: Includes speciality fertilisers, bio-simulants, and performance-enhancing soil products.
• Biologicals: Comprising bio-fertilisers and natural stimulants like Biogold and Indo Mycoriza, aimed at sustainable farming.

Additionally, ICL offers contract manufacturing for custom agrochemical formulations and has built long-term relationships with clients like Crystal Crop Protection and Krishi Rasayan. With over 728 employees and robust R&D capabilities, ICL’s competitive strengths lie in its diversified product mix, backwards-integrated manufacturing, experienced promoters, and wide distribution reach in both retail and institutional markets.

Industry Outlook 

The agri-input industry, encompassing seeds, nutrients, and crop protection, is pivotal to sustainable agriculture and food security. In India, seeds contribute directly to 15–20 per cent of total agricultural production. The Indian seed industry has seen significant policy reforms aimed at enhancing access to high-quality seeds and attracting private investment. The government has further liberalised the sector by permitting FDI, which is expected to improve innovation and boost domestic capabilities.

Fertilisers remain a vital component of the agricultural ecosystem, crucial for soil fertility and higher yields. India is highly import-dependent for key nutrients like Nitrogen, Phosphorus, and Potassium, and demand for these is expected to remain stable given soil deficiencies.

Globally, the crop protection and nutrition industry expanded at a CAGR of 6.2 per cent during 2019–2024 and is forecast to grow at 6.3 per cent CAGR between 2024 and 2029. Growth is driven by increasing crop protection needs, evolving consumer preferences for safe food, and innovations in bio-based solutions. The APAC region leads this growth, supported by government subsidies, while South America and Europe follow due to expanding crop acreage and agricultural modernisation.

In India, supportive government programs such as “Make in India” and “Aatmanirbhar Bharat” are boosting domestic production. Bio-fertilisers and bio-stimulants are witnessing accelerated adoption due to the push for organic and sustainable farming. The Indian pesticide market, growing at 7.2 per cent CAGR, benefits from increased crop protection needs and rising exports. An estimated $5 billion worth of off-patent molecules by FY27 offers a substantial opportunity for Indian manufacturers.

Overall, the outlook for Indogulf Cropsciences is positive, anchored in robust domestic demand, export potential, and growing adoption of sustainable agri-solutions.

Financials 

Indogulf Cropsciences reported revenue of Rs 464.19 crore in 9M FY25, reaching 84 per cent of FY24’s full-year revenue of Rs 552.23 crore, indicating healthy growth momentum. EBITDA stood at Rs 44.79 crore, maintaining margins near 9.65 per cent, in line with historical performance. Net profit for the nine months was Rs 21.68 crore, reflecting a net margin of 4.67 per cent, slightly below FY24’s 5.11 per cent. While the company has sustained operational profitability, slight margin compression is visible year-on-year.

(Source – Company’s RHP)

On the profitability front, EBITDA margins have remained relatively stable. The company credits margin stability to steady revenue growth, operational efficiency, and product diveRs ification. PAT margins mirrored this trend, dipping to 4.08 per cent in FY23 due to rising raw material costs and higher finance expenses, but recovering to 5.11 per cent in FY24 and 4.67 per cent in 9M FY25, aided by revenue growth and improved profitability

(Source – Company’s RHP)

Indogulf Cropsciences Limited has witnessed a consistent rise in its total borrowings, climbing from Rs 101.38 crore in FY22 to Rs 206.30 crore by 9M FY25, with a temporary dip in FY24. This rise is largely driven by the company’s need to fund working capital for its capital-intensive agrochemical operations, including the procurement of raw materials and packaging. Additionally, borrowings are being utilized for capital expenditure to expand manufacturing capacity. As of April 30, 2025, total consolidated borrowings stood at Rs 256.82 crore.

The company’s total assets also grew from Rs 413.59 crore in FY22 to Rs 597.81 crore in 9M FY25, indicating substantial investments in manufacturing expansion, inventory buildup, and receivables. Capital expenditure rose to Rs 31.65 crore in 9M FY25. Inventory levels increased to Rs 210.22 crore to meet seasonal demand and pest risks, while trade receivables rose to Rs 228.25 crore due to post-harvest payment cycles. Despite these investments, manufacturing capacity utilisation remained below 50 per cent, signalling under-utilisation risks.

(Source – Company’s RHP)

Indogulf Cropsciences Limited has exhibited steady top-line growth, with revenue increasing at a CAGR of 4.26 per cent between FY22 and FY24. Notably, the company has already achieved Rs 464.19 crore in revenue during 9M FY25, which is over 95 per cent of its FY24 full-year revenue, suggesting a strong year in the making. However, this growth in revenue has not been matched by improvements in cash generation or working capital efficiency. Trade receivables have expanded sharply, rising at a CAGR of 16.06 per cent over the same period, significantly outpacing sales. By 9M FY25, receivables accounted for 49.17 per cent of sales compared to 29.06 per cent in FY22, indicating deteriorating collection efficiency and potential stress in receivables management.

Cash flow from operations (CFO), which reflects the company’s ability to convert profits into cash, has been volatile. While the company generated a positive cash flow of Rs 53.34 crore in FY24, 9M FY25 saw a reversal with negative cash flow of Rs 18.80 crore, suggesting that accounting profits are not translating into real cash profits. This issue is compounded by an increase in the cash conversion cycle from 158 days in FY22 to 231 days in 9M FY25, highlighting longer durations to convert inventory and receivables into cash.

In summary, while Indogulf Cropsciences is growing its sales, it is not generating consistent cash from operations. The sharp rise in receivables, extended cash conversion cycle, and recent negative operating cash flows raise concerns about liquidity management. The company must address these working capital inefficiencies to ensure that its growth remains sustainable and is backed by healthy cash generation.

Key ratios

 (Source – Company’s RHP)

Peer Comparison 

The listed peers for Indogulf Cropsciences Limited include Aries Agro Ltd, Basant Agro Tech India Ltd, Best Agrolife Ltd, Bhagiradha Chemicals & Industries Ltd, Heranba Industries Ltd, India Pesticides Ltd, and Dharmaj Crop Guard Ltd.

SWOT Analysis

Strengths

• Diverse Product Portfolio: Expanded from 198 to 262 products (till Dec 2024), spanning crop protection, plant nutrients, and biologicals, reducing reliance on single products or cycles.
• Established Distribution Network: Strong domestic presence across 22 states and 3 UTs via 6,916 distributors and 192 institutional partners; international reach with 143 overseas partners in 34+ countries.
• Integrated Manufacturing Infrastructure: Four multipurpose ISO-certified manufacturing units enhance customisation and improve operating margins through captive consumption.
• Strong R&D and IP: NABL-certified R&D lab with 800+ product registrations, 6 patents, and 225 trademarks drives innovation and product differentiation.
• Experienced Leadership: Promoters and senior management bring deep industry experience, aiding in strategic execution and global growth.
• Export Recognition: Recognised as a 'Two Star Export House' by the Government of India, strengthening its export credibility.

Weaknesses

• Low Capacity Utilisation: Capacity utilisation stood at just 49.58 per cent in FY24, indicating underutilised assets and cost inefficiencies.
• Receivables Pressure: Agrochemical sales are seasonal and credit-driven; receivable turnover days were 146 in FY24, posing risks to cash flow and profitability.
• Volatile Input Costs: Dependency on raw material imports exposes the company to price swings and currency risks, affecting margins.
• High Capital Intensity: Growth depends on significant capital investment, which may require external financing under uncertain terms.
• Dependence on Third-Party Logistics: Relies on external providers for logistics, making it vulnerable to supply chain disruptions and fuel cost fluctuations.
• Intense Industry Competition: Competes with large multinational and domestic players with superior resources, R&D, and brand recall.
• Climatic & Seasonal Sensitivity: Performance is directly tied to favourable weather and crop cycles, which are inherently unpredictable.

Opportunities

• Rising Domestic & Global Demand: The agrochemical market is expected to grow steadily, driven by food security needs, higher yields, and supportive government policies.
• Bio-Product Adoption: Growing preference for organic and sustainable agriculture is boosting demand for bio-fertilisers and bio-stimulants.
• Off-Patent Molecules: Patent expiries open up a $5 billion global opportunity for Indian manufacturers to develop generics and grow exports.
• Climatic Trends Increasing Pesticide Use: Changing climate patterns could raise pesticide demand due to increased pest outbreaks.
• Expanding Export Markets: Plans to enter new international markets such as the USA, South Korea, Turkey, and Morocco will broaden revenue streams.
• Product Diversification Plans: The company aims to launch new products across all verticals and price segments to capture a wider market share and improve margins.

Threats

• Regulatory Risk: Any policy changes restricting agrochemical usage could impact product approvals, exports, and domestic sales.
• Input Supply Disruptions: Volatility in the global supply chain can lead to raw material shortages and delays in production.

Valuation and Outlook

India’s pesticide market is poised for strong expansion, with a projected 8.8 per cent annual growth through 2029. Coupled with a 4–6 per cent increase in domestic production and the tailwinds of the China-plus-one strategy, the macro landscape offers fertile ground for players like Indogulf Cropsciences Ltd. The company, with 91.6 per cent of its FY24 revenue stemming from crop protection products, is well-positioned to benefit from this structural demand. Its widespread domestic presence—with over 6,900 distributors across 22 states and 3 UTs—and export reach to 34 countries provide a robust distribution backbone, enhanced by 150 international product registrations as of April 2025.

Yet, Indogulf operates in a highly seasonal and competitive industry. The business’s long working capital cycle—netting 200 days in FY24—reflects the sector’s monsoon dependence and tight liquidity cycles, which often compel reliance on short-term borrowing. Furthermore, the company remains exposed to raw material price volatility due to significant dependence on imports.

On the valuation front, Indogulf’s issue appears fairly priced. Based on annualised 9MFY25 earnings, it is valued at a P/E of 16.3x, P/B of 1.13x, and EV/EBITDA of 14.3x—all of which compare attractively with the industry averages (P/E: 23.1x, P/B: 1.61x, median EV/EBITDA: 14.6x). Post-issue, the implied market cap stands at Rs 702 crore. Return ratios like RoCE (13.5 per cent), RoE (14.4 per cent), and RoA (5.96 per cent) also lend credibility to the company’s operational efficiency.

While revenue remained flat in FY23 and FY24 due to raw material volatility, policy support for agri-inputs and a strong global export outlook point to long-term upside.

Recommendation: Investors with a high-risk appetite may consider subscribing with a medium to long-term perspective, given the fair valuation, sectoral tailwinds, and potential for margin expansion.