Tips to save IPO listing gains tax!
In the years 2023 and 2024, many IPOs brought huge earnings for the investors. But tax also has to be paid on this! What is the tax rule on booking listing gains from IPO? How can tax liability on listing gains be reduced? How will the tax be calculated on selling IPO shares?
Uttar Pradesh-based agrochemicals manufacturer India Pesticides’ Rs 800 crore initial public offering (IPO) is set to hit the streets next week on June 23. Here are 9 things that you should know about the IPO.
Open and close date: The the three-day issue will open on June 23 and close on June 25.
Issue size: The agrochemicals manufacturer plans to raise Rs 800 crore through the public listing of shares. The issue comprises a fresh issue of Rs 100 crore and an offer for sale (OFS) of Rs 281.40 crore by Anand Swarup Agrawal and Rs 418.60 crore by other shareholders and promoters.
Price band: The price band for India Pesticides IPO has been fixed at Rs 290-296 per share of the face value of Rs 1.
Lot size: Investors can bid for a minimum of 50 equity shares and in multiples, thereafter, translating to a minimum bidding amount of Rs 14,800 at the higher end of the price band. A retail investor can at max apply for 13 lots or 650 shares for 1,92,400.
Objective of issue: The company intends to use net proceeds from fresh issues for funding working capital requirements.
About the company: Incorporated in 1984, India Pesticides Limited (IPL) is one of the leading agrochemicals manufacturers in India. The company operates in two business verticals; 1 Technicals and 2. Formulations. It manufactures herbicide, fungicide Technicals, and Active Pharmaceuticals Ingredients (APIs). It operates out of two manufacturing facilities in Lucknow and Hardoi in Uttar Pradesh, having an aggregate capacity of 19,500 MT for technicals and 6,500 MT for the formulations vertical.
It has registrations and licences for 22 agrochemicals technical and 124 formulations for sale in India, and 27 agrochemicals technical and 34 formulations for exports.
On the financial front, the company reported total revenue of Rs 655.37 crore in FY21 compared to Rs 346.04 crore in FY18. Whereas its profit after tax grew to Rs 134.53 crore versus Rs 43.92 crore during the same period.
What’s in it for retail investors: Half of the issue is reserved for qualified institutional buyers, 35% for retail investors and 15% for non-institutional bidders.
Book Running Lead Managers and Registrar to the IPO: The book running lead managers to the issue are Axis Capital and JM Financial. The registrar to the issue is KFintech Private Limited.
Issue timeline: The issue is likely to finalize the basis of allotment by June 30, and the initialization of refunds will take place by July 1. While the credit of equity shares to depository accounts of the allottee will be done on July 2. The company is expected to make its stock market debut on July 5, 2021.