The global pesticides market has grown at a compound annual rate of 4.3% to $67 billion in 2020 from $57 billion in 2016. It is expected to grow1.6-1.8% through 2024 and reach about $71-$72 billion.
India ranks fourth in the world in agrochemicals production and 13th in pesticides exports globally. The country’s pesticides output increased at 4.5% annually from 214 thousand tonnes in 2016-17 to 255 thousand tonnes in 2020-21. It is estimated that pesticides output would grow 3.5-4.0% by 2023-24.
Dharmaj Crop Guard Limited recently filed a draft red herring prospectus for an initial public offering, to raise ₹300 crores. The issue consists of an offering of equity shares worth up to ₹216 crores, with a face value of ₹10 each, and an offer for sale of up to 14.83 lakh shares by existing shareholders.
The company plans to use ₹104.9 crores from the net proceeds towards setting up a manufacturing facility at Saykha Bharuch, Gujarat. In also intends to use ₹45 crores to fund working capital requirements in 2023. Around ₹10 crores will be used for the repayment and prepayment of loans, and the remaining amount for general corporate purposes.
Agrochemicals Market
Dharmaj Corp is an agrochemical company engaged in the manufacturing, distribution, and marketing of a wide range of agrochemical formulations such as insecticides, fungicides, herbicides, plant growth regulators, micro fertilizers and antibiotics, targeting B2C and B2B customers.
The Ahmedabad-based company sells its products in granule, powder and liquid forms. The products are exported to more than 20 countries in Latin America, East Africa, the Middle East and Far East Asia. Additionally, the company manufactures and sells general insect/pest-control formulations.
Dharmaj Corp’s competitors mainly include national players such as Bharat Rasayan Limited, India Pesticides Limited, Heranba Industries Limited, Punjab Chemicals, Crop Protection Limited and Rallis India Limited.
Key Numbers
For the fiscal year ended in 2021, Dharmaj Corp had total revenue of ₹303 crores, compared to $199 crores in the previous year. The company reported a net profit of ₹209 crores for the year, compared to ₹107 crores in 2020.
Being an agrochemical company, the most important determinant of the company’s sales is the volume of crops planted. The crops are typically sensitive to weather conditions like rain, draught, floods and cyclone, which would influence the company’s business in regions where its products are used.