Course Code: FIN 509 Course Title: Investment Banking

Course Instructor: Komalpreet Kaur

Academic Task No.: 2 Academic Task Title: Assignment

Date of Allotment: 10thMarch, 2020 Date of submission:20th April, 2020

Student’s Roll no: A30, A45 , A09 , A10 Student’s Reg. no: 11910088, 11911770, 11908068, 11908099
Evaluation Parameters:

Learning Outcomes: I have learned the

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I declare that this Assignment our group work. We have not copied it from any other student’s
work or from any other source except where due acknowledgement is made explicitly in the text,
nor has any part been written form by any other person.

Student’s Signature:

Evaluator’s comments (For Instructor’s use only)

General Observations Suggestions for Improvement Best part of assignment

Evaluator’s Signature and Date:

Marks Obtained: M ax.Marks: …………………

 Simarjeet Mayank Anirbana Bogam
Singh Kumar Das Pavan
Varshney

Simarjeet
Name Singh Registration Number Signature

Mayank Kumar 11910088

Varshney
Simarjeet Singh

Anirbana 11911770
Das
Mayank Kumar Varshney
Bogam
Pavan 11908068

Anirbana Das

11908099
Bogam Pavan

ACKNOWLEDGEMENT
In the past few weeks, we worked very hard to ensure the accomplishment of this case
study and learning as much as we can from this assignment. During the accomplish of this
assignment, we are really blessed to have the help and guidance of some respected
individuals, who deserve our greatest gratitude. The completion of this assignment gives
us so much pleasure.

First and foremost, we would like to thank our “----------------” Professor, -----------------------Sir,
for giving us an opportunity to do this assignment work and providing us all support and
guidance which made me complete the assignment on time. Our group is very thankful to him
for providing a nice support and guidance. We would like to thank each member of the group
who has participated and worked hard to complete this assignment. With the valuable suggestion
and open-minded personnel everything goes smoothly as how we wish to be. With the
cooperation and effort of every member, this assignment has been completed.

We would like to express our gratitude to our friends and seniors for support and to spend
some time with us helping in the assignment.

Thank You…

CONTENT:

 INTRODUCTION ( Business Profile)

 COMPANY PROMOTERS

 LEAD MANAGER AND ITS HISTORY

  ROLE OF LEAD MANAGER IN TERMS OF MARKETING AND
OTHERS

 DATE OF ISSUED IPO , OVERALL SUBSCRIPTION

 RETAIL & NON RETAIL SUBSCRIPTION

Shree Pushkar Chemicals & Fertilisers Limited

Company Profile

INTRODUCTION

Shree Pushkar Chemicals and Fertilizer ltd., which was incorporated in 1993 is a Mumbai India
based deals with the manufacturer of Dyes, Dye Intermediates, and Fertilizers. Having started
development with a single product in the year 2001, we have quickly expanded its range to over
25 products. Today we are a force to be dealt with and on the road to sustained leadership. Shree
Pushkar Chemicals & Fertilisers Limited is an Indian-based company engaged in the
manufacture and trade of intermediate chemicals, colors and dyes, cattle feeds, fertilizers and soil
conditioners. The Company's dye products include acid dyes, direct dyes, and reactive dyes
under product names such as Leather Brown GG, Brown GR, Red F3B, Strong Red 46, Yellow
GR and Yellow FG. Pushp Ahaar and Di Calcium Phosphate (DCP) are additives to cattle feed.
The Division of fertilizers provides products like SSP, SC, NPK, and SOP. It also comes with
Dharti Ratna, a Gypsum-based soil conditioner. Manufacturing facilities of the Business unit
include a wide range of chemical reactions which includes sulfonation, reduction, nitration,
acetylation, condensation, isolation, hydrolysis, amination, fusion, & acetylation. The company
is committed to the manufacturing of tolls. Promoted by businessmen of the first generation, the
Company's dedication has always been to a safe and sustainable operating structure.

The professionals team is constantly engaged in strategic planning that includes forward &
backward integration, improvising optimum utilization of resources, upgrading technology and,
most of all, identifying areas for eco-friendly products and process improvements. This
contributed to our exponential growth and to the development of a track record as a reliable
player in the segment. With our new investment in the manufacture of Reactive Dyes and Textile
Chemicals, the company has moved to the Textile Effects industry as a "one-stop shop."

SHREE PUSHKAR also produces a wide variety of fertilizers and soil conditioners, from the
smallest of "Farmers to Multinationals." The head office works from the country's financial hub,
Mumbai, India, and our manufacturing units are situated strategically close to 4 ports. We work
on more than 100,000sq.mt together. Of land at MIDC Lote Parshuram, Ratnagiri district,
Maharashtra, India- one of the country's leading chemical belts.

The company operates in 5 vertical

 Dyes .
 Dye intermediates.
 Acid.
  Fertilizers.
 cattle feed Supplement.

Vision

Vision is to be one of the major players in the Fertilizer Industry and one of India’s major Dyes
& Dye Intermediates Value Chain Company.

Mission

Mission is to reinforce our rate of growth also as maintain ; SHREE PUSHKAR proposes further
expansion by way of organic and inorganic growth of the prevailing capacities as also venture
into newer areas. With the knowledge in production of complex organic chemicals, the corporate
proposes further expansion not only within the areas of Dyes but also into allied specialty
chemicals.

Company Promoters:

Punit Makharia & Gautam Makharia are the two promoters of the company.
BOARD OF DIRECTORS

Managerial Structure
 SWOT ANALYSIS

Strength

 Rising Cash from operating activities and Net Cash Flow

 Increasing profit margin with the growth in Net profit..
 Quarterly growth in Net Profit with increasing Profit Margin.
 Company with Low Debt Increasing profits every quarter for the past 2 quarters.
 Improving Annual Net Profit for last 2 years.
 Improving Book Value per share for last 2 years.
 Company with Zero Promoter Pledge.

Weakness

 Companies with growing costs for long- term project.

 Inefficient capital use to generate profits.
 ROCE declines over the past 2 years.
 Revenue and Profit declines.
 Quarterly Net Profit declines.
 Quarterly Revenue declines and Recent Profit declines.
 Trailing Twelve Months (TTM) Net Profit declines.
 Recent results: Quarterly Revenue declines and Net Profit declines.

Opportunities

 Stock with Low PE ( Price earning ) (PE < = 10)

Threats

 Relative strength index (RSI) indicating price weakness

 LEAD MANAGER

Lead Managers are autonomous financial institutions named to administer the IPO by the
company's going public. They are the principal body responsible for most processing of the IPO.
This study reveals the IPO's managed list as the lead manager of Keynote Corporate Services
Ltd.

KEYNOTE CORPORATE SERVICE LIMITED is the lead manager for Shree Pushkar
chemicals and fertilizers ltd. Report also offers information on: How many times have issues
been subscribed (over-signed)? The final price of the problem discovered during IPO Process. In
percentage the listing gains / loss.

History Of Lead Manager

Keynote is a full service investment bank and brokerage house providing extensive financial
advice and services. It was founded in 1993 and registered as SEBI Category I Merchant Bank,
and has been promoted by professionals with over three decades of wealth of financial and
capital markets experience. Keynote has remained committed to providing quality Investment
Banking solutions combined with honesty and innovation in every daunting scenario ever since
its inception. Our services give our clients access to Capital Markets, Corporate Finance
Advisory, Advisory on Mergers and Acquisitions, ESOP Advisory, Equity / Debt Placements
and Restructuring.

Keynote has over two decades of Equity Capital Markets, Corporate Finance and Consulting
experience and a track record of more than 400 transactions under its belt as a measure of its
performance. Markets, advisory and corporate finance with a track record of over 400 different
transactions. Over the years, Keynote has built a strong partnership with mid-market business
groups, as well as a deep relationship with domestic & global banks, mutual funds & FIIs that
invest in India. It is committed to long-term partnerships and has invested a professional and
knowledgeable team in its customers and their company.

IPO/ RIGHTS ISSUE

When it comes to IPOs in the mid-market segment, we were a front runner. We carry out all
IPO-related tasks, including valuation reports, due diligence, assessment of the fund requirement,
publicity, underwriting of the issue, lead management, ensuring that all regulatory procedures are
followed and all documents are prepared , where we ensure your IPO is not only subscribed but
over-subscribed. They follow the IPO markets very closely and have built in-depth knowledge
and experience of the Listing Regulations required. To date, we have more than 130 IPOs
controlled and supported by Lead.
 IN WHICH YEAR THEY PROVIDED IPO

The shree pushkar chemicals and fertilisers they provided in the year 25-08-2015 .An initial
public offering (IPO) it is the process of which a privately held company issues shares of stock to
the public for the first time. An IPO is an important thing in the growth of many businesses, as it
provides them with access to the public capital market and raise the funds and also increases
their credibility and exposure. And later Shree Pushkar Chemicals and fertilisers were scanned
by the “vs Fernando” is a financial analyst and columnist, whose association with the Indian
capital markets is more than three decades and he is an expertise in ipos and When ‘equity
research’ and he was novel in the country, Fernando arranged a full-fledged Equity Research
Division at JM Financial in 1983. He was the member of an ‘analysts’ team’ of `Capital Market
 India’s first “scientific investment magazine” which introduced the `Numerical Equity Rating’
in the year 1986.
Shree Pushkar Chemicals and Fertilisers IPO scan by the VS Fernando:

Name Shree Pushkar Chemicals & Fertilisers Ltd

Fresh issue of 87.43 to 94.49 lakh shares of Rs 10 each from

Public Offer the company and Offer for Sale of 20.27 lakh shares from
IFCI Venture Capital

Offer % on Total Equity 35.64% to 37.11%

Post-IPO Promoter Stake 58.9% to 60.27%

Offer Price Between Rs 61 and Rs 65 

Offer Amount Rs 70 cr   

Application Quantity 200 & Multiples of 200

Bid/Offer Opens 25-Aug-15

Bid/Offer Closes 27-Aug-15

 Listing NSE and BSE

IPO Rating Nil

Book Running Lead Manager Keynote Corporate Services

Registrars Big share Services

The IPO:
 The firm is planned to enter in the capital market with an IPO in equity share and its face
value is 10 Rs in each share and they to aggregating up to 70cr
 The present offer valued Rs 70 crore to be made up of Fresh Issue of 87.43 to 94.49 lakh
shares of Rs 10 each (aggregating to Rs 57 crore) from the company and Offer for Sale of
20.27 lakh shares (Rs 13 crore) from IFCI Venture Capital.
 the offer is being made through the book-building route and the price band of Rs 61-65.
The IPO constitutes 35.64% to 37.11% of the company’s post-IPO equity of over Rs 30
crore and its increases to promoters propose to hold 59-60%.
 Shareholders and investors have to apply for a minimum of 200 shares (Rs 12200).
Keynote Corporate service limited has been appointed as the book running lead manager.
IPO Object:
 The company planning to utilize the fresh issue given proceeds for the following:
 It is obtained of an existing factory with in the MIDC Industrial Area, Lote-Parshuram,
at a cost of Rs 2.29 crore
 Setting up of facilities at the obtained factory at a cost of Rs 41.59 crore for produce to
make of Reactive Dyes (3,000 TPA) H-Acid (750 TPA) and Vinyl Sulphone Ester (1,000
TPA);
 Setting up of additional effluent treatment plant at the existing facility (Unit I) to make
the unit a “Zero Discharge” unit at Rs 4.88 crore
 the construction and the additional Go down(s) at the existing facility (Unit II) for
meeting the additional storage requirements for finished goods at a cost of Rs 2.38 cr.
  Over the past few years, the company maintained to have emerged as one of the few
manufacturers with widest range of dye intermediates in India with zero waste.
 It reportedly has state of art consolidated manufacturing facilities at Lote Parshuram,
Maharashtra.
 The shree pushkar chemical ltd company is said to be amongst India`s large
manufacturers of K-Acid – an intermediate used for manufacturing Reactive Dyes used in
textiles.
 In 2009 the company occupied additional plot at Lote Parshuram, for setting up a plant
for manufacture of fertilizers.
 It commenced to manufacturing of fertilizers in 2011 besides commissioning a 500KW
Captive Power Plant.
 The name of the company was changed to Shree Pushkar Chemicals & Fertilisers Ltd
(SPCFL) in the year 2012.
Currently SPCFL is have four major verticals they are Dye Intermediates, Acid Complex
(comprising sulphuric and its derivative acids), Cattle Feed Supplement and Fertilizers (Single
Super Phosphate & Soil Conditioner).

Financial Performance:
 SPCFL is a decent financial track. It is in the top line has more than doubled in last five
years.
 Net profit has constantly increased from Rs 2.75 crore in FY11 to Rs 18.65 crore in
FY15.
 importantly its operating cash flow has increasing positive in last three years which has
helped the company to significantly decrease the debts as well as interest burden.
 The company has a manufacture asset (net block) worth Rs 69 crore against which its
borrowings stood at less than Rs 25 crore.
 Never the less, one aspect that does not give much comfort is the company’s operating
margin.
 In the last five years the profit margin has not moved beyond 13.9% .
  In fact, in last fiscal years it has dropped to 11.8%. Also, the last two-decade old
company is yet to join the dividend list.  

Financial performance of the company

(Rs in lakh) Mar-15 Mar-14 Mar-13 Mar-12 Mar-11

Gross Revenue 26681 21037 17657 15097 13126

Dye Intermediates 20268 16536 12809 11477 12234

Dye Intermediates % 76 79 73 76 93

Operating Profit 3184 2945 2331 2029 1010

Operating Margin % 11.8 13.9 12.9 13.3 7.2

Interest 542 1062 1028 962 361

Depreciation 363 464 405 339 191

Tax 415 375 173 193 183

Net Profit 1865 1044 725 535 275

Net Oper. Cash Flow 4968 2590 1478 -966 876

Equity Cap 2071 2071 2071 2071 2024

Reserves 6745 4289 3246 2492 1879

Net Block 6912 5805 5767 5284 4854

Long Term Borrowings 27 1203 1114 645 641

Short Term Borrowings 2456 4976 6097 5770 3171

 Retail and Non Retail Subscription

The issue was made through the Book Building Process in compliance with Regulation 26(1) of
the Securities and Exchange Board of India Regulations, 2009, as amended ('SEBIICDR
Regulations'), where no more than 50 per cent of the issue was eligible for allocation on a
proportionate basis to Qualified Institutional Buyers ('QIBs') ('QIB Category'). 5% of the QIB
group was only eligible for allocation on a proportionate basis to the Mutual Funds and the
remainder was eligible for allocation on a proportionate basis to the QIBs and Mutual Funds,
subject to valid Offers obtained from them at or above the Issue Price. In addition, 15 percent of
the issue was available for allocation on a proportionate basis to Non-Institutional Investors and
35 percent of the issue was available for allocation to Retail Individual Investors, subject to valid
bids received at or above the Issue Price, in compliance with the SEBIICDR regulation. The
involvement of QIBs and non-institutional investors in the issue through the

ASBA process was mandatory.

Allotment to Retail Institutional Investors (After Technical Rejections) (including ASBA
Applications):

In consultation with NSE, the allocation basis for Retail Individual Investors who have a Cut-off Price
offer or the Issue Price of Rs 65 per Equity Share has been finalized. The category has been subscribed
1,553 times in the region. In this group, the total number of Equity Shares Allocated is 37,69,220 Equity
Shares to 18,846 active applicants. The category-wise allocation basis specifics are as follows:

Allotment to Non Institutional Investors (After Technical Rejections) (including ASBA

Applications): In consultation with the NSE, the allocation basis for the non-institutional
investors, who have a offer at the Rs 65 issue price per equity share, was finalized. This category
has been subscribed 2,187 times in length. The total number of Equity Shares allocated to 61
active applicants in this group is 16,15,380 Equity Shares. The category-wise allocation basis
specifics are as follows:
Allotment to QIBs Investors (After Technical Rejections):

In consultation with the NSE, the allocation criteria for QIBs that have a bid at the Issue Price of
Rs 65 per Equity Share was performed on a proportionate criteria. This category has been
subscribed 1,036 times in the region. According to the SEBI Regulations, 5 percent of the Net
QIB Portion's equity shares, available i.e. 2,69,230 Equity Shares and other QIBs including
Mutual Funds, is allocated on a proportionate basis to the remaining 51,15,370 Equity Shares
available. The total number of shareholdings allocated in the QIB group is 53,84,600 equity
shares, allocated to 12 successful applicants. The category-wise allocation basis specifics are as
follows:

At its meeting on September 5, 2015, the Company's Board of Directors approved the basis for
allocating the equity shares as approved by the Designated Stock Exchange, being NSE and
allocating the equity shares to different qualified applicants. The Allotment Advice-cum-Refund
Orders and/or Notices is sent to the investors' address as reported with the depositories on or
before September 8, 2015. In addition, directions were dispatched / mailed to the Self Certified
Syndicate Banks on September 7, 2015. Should the same not be received within ten days,
investors can contact the Issue Registrar at the address given below. The Refund Orders is
overprinted with the bank account information as being registered with the depositories, if any.
On September 7, 2015, the Equity Shares allocated to the active allottees were transferred to the
respective beneficiary accounts for credit, subject to confirmation of account data with the
respective depositories. Our Company is taking steps to complete the formalities required to get
the Equity Shares accepted for trading on the BSE and the NSE within twelve working days from
the closing date of the bid / issue.

Whether the company issued over subscription or under

subscription

The Shree Pushkar Chemicals IPO is subscribed 1.40x by Aug 27, 2015. The qualified
institutional bidder’s subscription was 1.04 times, while the non-institutional investor
subscription was at 2.23 times. The retail subscription was approximately 1.62 times at the upper
end of the worth band. Total number of bids registered around 20450. The difficulty had opened
for subscription on August 25 and closed on August 27, 2015. the dimensions of the IPO was Rs
70 crore, consisting of a fresh issue and a suggestion purchasable of 20,26,589, by IFCI risk
capital Fund, which was a part of its shareholding in Shree Pushkar Chemicals & Fertilisers.
Shree Pushkar Chemicals IPO oversubscribed within the retail category, the Shree Pushkar
Chemicals IPO shares are going to be distributed on a proportionate basis to Retail Individual
Investors (RII). Each retail investor will get a minimum of 1 lot subject to the supply of shares
within the retail portion. If enough shares aren't available, a lottery is drawn to settle on the
investors and also it’s oversubscribed in Non-institutional investor’s category in order that they
will proportionate among them and just in case of qualified institutional buyer’s category they
need decided to allot the shares in two manners:

a) Equity Shares shall be allocated on a proportionate basis to Mutual Funds only.

b) Equity Shares shall be allocated on a proportionate basis to all or any QIBs including
Mutual Funds receiving allocation as per (a) above.

Investor Category Subscription (times)

Qualified 1.04x
Institutional

Non Institutional 2.18x

Retail Individual 1.59x

Total Subscription 1.40x

Qualified Institutional Buyers (QIB) 5,737,705 Shares

Non-Institutional Investors (NII) 1,721,311 Shares

Retail Individual Investor (RII) 4,016,394 Shares

Total Issue Size 11,475,410 Shares

Why company share oversubscribed:

Below are the few reasons why the company shares oversubscribed.

GROWTH IN INCOME AND REVENUES: Shree Pushkar Chemicals and Fertilisers

Ltd. may be a growing company and also its revenue is growing year by year so it’s a sign for
the investor to take a position within the company’s IPO to earn profits. In below table you'll see
how from 2010 to 2014 revenue is increasing year by year so this is often one among the most
reason to take a position during this IPO.

PROFIT & LOSS ACCOUNT OF SHREE MAR MAR MAR MAR MAR
PUSHKAR CHEMICALS AND FERTILISERS (in 14 13 12 11 10
Rs. Cr.)
INCOME
REVENUE FROM OPERATIONS [GROSS] 220.9 181.0 156.2 134.7 104.9
2 1 3 8 6
Less: Excise/Sevice Tax/Other Levies 12.40 6.40 6.23 4.28 3.26
REVENUE FROM OPERATIONS [NET] 208.5 174.6 150.0 130.5 101.7
2 1 0 0 0
TOTAL OPERATING REVENUES 210.0 175.9 150.7 130.5 101.7
9 8 1 7 0
Other Income 0.28 0.59 0.26 0.69 0.11
TOTAL REVENUE 210.3 176.5 150.9 131.2 101.8
7 7 7 6 1

 POSITIVE CASH FLOW: Company is in a position to take care of an adequate

level of money to satisfy upcoming liabilities may be a good sign for its financial health.
This suggests that company manages its cash and price levels well, which may be a key
determinant of the company’s health. Company seems to possess put its debt to good use,
generating operating cash levels of 1.2x total debt within the most up-to-date year. This is
often also an honest indication on whether debt is correctly covered by the company’s
cash flows.
  LOW DEBT: Shree Pushkar Chemicals & Fertilisers Limited have lower debt than its
competitors so it’s a advantage of company and attract investors because company with
low debt have a better chances to grow in future.
 SINGLE LOCATION: Shree Pushkar Chemicals & Fertilisers Limited all
manufacturing facilities located within MIDC, Lote Parshuram, Maharashtra, which help
them to save their cost so they can produce a product or service at a lower cost than the
competition so they have a cost efficient model.
 EXPANSION IN INORGANIC GROWTH: company also taken first step
towards inorganic growth by 100% equity acquisition of Kisan Phosphates Pvt Ltd,
located in Hisar, Haryana so they are also expanding their business in inorganic growth
so this helps company to grow faster and also to maximize their profits and wealth. So
these all are the reasons why companies share oversubscribed.

Whether the company was able to utilize properly or not

Company has set some objectives during fresh issue of share which they want to achieve
while launching their IPO so below are those:

 Company first objective is to acquire their existing factory within MIDC Industrial Area
Lote-Parshuram bearing no. B-97 so they have acquired this factory in 2019 The Board
 has approved a proposal of acquiring an additional plot of land in MIDC, Lote
Parshuram, Ratnagiri-MH, admeasuring 34,408 Sq.Mts. for further expansions.
 Their second objective is to Setting up of facilities at B-97 for manufacture of, H-Acid
with a capacity of 750 TPA and Vinyl Sulphone (VS) Ester with a capacity of 1,000 TPA
and the company is able to achieve more than what they want to expand their capacity ate
the time issue.

 Third objective they want to achieve is setting up of additional effluent treatment plant at
the existing facility (Unit I) to make the unit a “Zero Discharge” unit and they have
achieved their objective they have setup their Zero Discharge unit plant which is located
at their Integrated Complex in Lote Parshuram.
 Fourth objective is they want to construct the additional Godown at their existing facility
(Unit II) for meeting the additional storage requirements for finished goods; company is
unable to construct their additional go down for their expansion of storage requirements
but they are planning to construct this as soon as possible.
 Companies other objective during fresh issue is to perform general corporate activities
and company take s initiatives under “Corporate Social Responsibility” (CSR), the
corporate has formed a CSR Committee comprising of Mr. Punit Makharia, Chairman &
director (Chairman), Mr. Dinesh Modi independent Director (Member) and Mr. Gautam
Makharia Joint director (Member). During the year Company has initiated some CSR
activities in its close vicinity. the corporate is additionally contemplating the thought of
formalizing the CSR activities by formation of public trust or the other suitable sort of
entity, to undertake the varied activities like education for under privileged, health and
sanitation, promoting and upliftment of cultural values, arts in order that they have
achieved their objective but they're unable to done this CSR activity per annum. the
typical net income for the last three years is Rs. 2202.16 Lacs and therefore the Company
is required to spend Rs. 44.04 Lacs towards CSR for the fiscal year 2016-17 but they only
donated around 3 lakh and remaining During that Year Company couldn’t spend
remaining Rs. 40.87 Lacs so they are not consistent in CSR activity.