The net proceeds from the issuance of 2,73,17,073 Equity Shares (worth Rs 112 crs) will be utilized for funding capex for setting up a new manufacturing facility (Rs 25 crs), funding working capital requirements (Rs 70 crs) and rest of the funds (Rs 17 Cr) have been kept for General Corporate Purpose.

Nova AgriTech Limited was established in Hyderabad in May 2007 and produces ag-chem products to aid farmers to grow crops. Three primary areas are prioritized: crop protection, plant nutrition, and soil health. Technology is used in the manufacturing process to create nutrient-dense, ecologically friendly products. The company manufactures, distributes and markets a broad range of product categories, including (a) soil health products, (b) crop nutrition products, (c) biostimulants, (d) biopesticides, (e) integrated pest management (IPM) products, (f) new technologies and (g) crop protection products. The subsidiary Nova Agri Sciences Private Limited is currently responsible to produce crop protection products.

One stop solution for soil health management, crop nutrition, bio stimulant, bio pesticides, Integrated Pest Management (IPM) and crop protection through diversified branded product portfolio.

2. Established distribution network across various geographies through many dealers.

3. Strengthening farmer outreach through Nova Kisan Seva Kendra.

4. Technology driven product development and marketing.

The following points should be kept in mind:

Nova Agritech, like any business, has its strengths and challenges. The business depends on its raw material sourcing heavily but unfortunately they do not have any sort of long term agreements with their suppliers, exposing them to risk in sourcing and availability of quality raw material. The business had a tough time managing its working capital requirements due to very high trade receivable days (203 days in FY23) which has led to an increase in short term borrowings and reduces cashflows. As a result trade receivables are also very high inflating current assets and creating a risk of any defaults. The nature of the business is such that it is dependent on climate conditions, any unfavorable or adverse climatic conditions would affect revenues. Since it is engaged in manufacturing crop protection products, the business is cyclical in nature.