Telangana-based agricultural input manufacturer Nova Agritech Ltd has submitted a draft red herring prospectus (DRHP) to the markets regulator Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO).

The issue, with a face value of Rs 2 per equity share, includes a new share issue worth up to Rs 140 crore and an offer for sale (OFS) of up to 77,58,620 shares by promoter-selling shareholder Nutalapati Venkatasubbarao.

After consultation with the Book Running Lead Manager (BRLM), the company and selling shareholders may consider placing shares worth up to Rs 25 crore before the IPO. Once such a placement is complete, the size of the offering will be adjusted. Bajaj Capital Limited and Keynote Financial Services Limited are the book-runners for the offering.

Of the proceeds, a total of Rs 14.20 crore will be invested in the company’s subsidiary Nova Agri Sciences Private Ltd to build a new formulation plant, Rs 10.49 crore will be used to finance the company’s capital expenditure to expand its existing formulation plant, and Rs 26.69 crore Rs 56.74 will be invested in the company’s subsidiary Nova Agri Sciences Private Ltd for working capital requirements.

The offer is made through a book-building process, of which no less than 15% of the offer must be made to non-institutional investors, and no less than 35% of the offer must be made to individual retail investors. No more than 50% of offers may be allocated to qualified institutional buyers.

According to DRHP, the company was founded in 2007 by Sambasivarao Yeluri and Kalyana Chakravarthy to become a one-stop solution provider for the farming community. It is currently led and driven by technologist Kiran Kumar Atukuri, who has over 20 years of experience in agrochemical, seed and fertiliser companies.

As of January 31, 2023, Nova Agriculture has registered 629 products. Its subsidiaries have registered 7 soil health management products, 168 crop nutrition products, 4 biopesticide products, and 450 crop protection products. In addition, Nova Agritech and its group companies applied for 79 additional registrations.

For the six months ended September 30, 2022, operating income was Rs 81.65 crore and profit after tax was Rs 6.86 crore.

The company’s shares are planned to be listed on NSE and BSE.