At the upper price band of Rs156, the company is priced at a price/earnings (PE) ratio of 13x the upper price band of Rs156 and 12x the lower price band of Rs145 on FY2014 earnings. This seems reasonable, given the company's strong balance sheet, healthy return ratios and earnings growth. Also, the offer price is at a discount to the comparable agrochemical companies (for whom the average PE ratio is around 25x FY2014 earnings). Further, the company's asset-light business model and focus on registration of the molecules make its business strategy unique as compared with its peers (that have a capital-intensive business model).
Remember to bookmark us for accurate IPO analysis for Indian and global stock market.