Balaji Phosphates is a fertilizer manufacturer, The company produces Phosphorus-based fertilizers. The company will launch its IPO on 28 February 2025. Before investing inventors should gain deep knowledge about the company’s business models, pros & cons, financials, and growth potential. Balaji Phosphate IPO review provides you with an in-depth analysis of all the aspects.
Table of Contents
#1 Balaji Phosphates IPO Review: Business Overview
Balaji Phosphates comes into existence in 1996. The company manufactures Single Super Phosphate (SSP), NPK Granulated & Mixed Fertilizers, and Zinc Sulphate. The company operates under the brand names ‘RATNAM’ and ‘BPPL’. Primary customers of Balaji’s products are farmers, wholesalers, and government cooperatives across Madhya Pradesh, Chhattisgarh, Maharashtra, Andhra Pradesh, and Telangana.
- Single Super Phosphate (SSP): Enhances soil fertility and plant growth.
- Zinc Sulphate: Addresses zinc deficiency in crops, improving yield and boosting overall productivity.
- NPK Granulated & Mix Fertilizers: Provides a balanced combination of nitrogen, phosphorus, and potassium, crucial for plant development, and long-term soil health.
#2 Balaji Phosphates IPO Analysis: Manufacturing Capacity & Utilization
Balaji Phosphates has a manufacturing unit in Dewas, Madhya Pradesh which spreads across 12,600 square meters. This facility has all the modern equipment to increase production and efficiency. As of 31 August 2024, the company’s production capacity utilization was:
| Product | Installed Capacity (MTPA) | Utilized Capacity (MTPA) | Utilization (%) |
| SSP | 120,000 | 26,163.50 | 52.33% |
| Zinc Sulphate | 3,300 | 1,148.45 | 83.52% |
| NPK Granulated & Mix | 49,500 | 150.00 | 0.072% |
The company has plans to improve utilization levels by expanding its production capabilities and optimizing supply chain management.
#3 Balaji Phosphates IPO Review: Industry Overview & Outlook
Fertilizer Industry in India
- India is the second-largest consumer of fertilizers globally, and demand is projected to grow steadily due to increasing agricultural activities.
- Government subsidies and increasing agricultural output drive demand, ensuring stable revenue opportunities for fertilizer manufacturers.
- SSP plays a crucial role in addressing phosphorus deficiency in soil, making it an essential input for sustainable agriculture.
- The specialty fertilizers market is projected to grow at a CAGR of 7-8%, driven by increased adoption of balanced nutrient solutions for crops.
- Rising concerns about soil degradation have led to a push for balanced fertilization, benefiting SSP producers like Balaji Phosphates.
Balaji Phosphates keeps focus on SSP and zinc-based fertilizers, and it benefits from the rising demand agri landscape. The company’s strategic expansion plans and commitment to innovation make it a formidable player in the competitive fertilizer industry.
#4 Balaji Phosphates IPO Analysis: Offer Details & Offer Structure
- Price Band: INR 66 – 70 per share
- IPO Open Date: 28 February 2025
- IPO Close Date: 04 March 2025
- IPO Listing Date: 07 March 2025
- Listing Exchange: NSE Emerge
- Fresh Issue: 59,40,000 shares
- Offer for Sale (OFS): 12,18,000 shares
- Total Issue Size: 71,58,000 equity shares
- Market Maker Reservation: 3,58,000 shares (5%)
- QIB Allocation: Up to 20,40,000 shares (30%)
- Non-Institutional Investors: Minimum 20,40,000 shares (30%)
- Retail Investors: Minimum 27,20,000 shares (40%)
Retail investors, comprising farmers, small-scale traders, and individual investors, have shown growing interest in the fertilizer industry, driven by government initiatives and sustainable agricultural practices.
#5 Balaji Phosphates IPO Review: Financial Highlights
The company has shown steady revenue growth, with a 4.85% YoY increase in FY 2024 and improved profitability despite rising costs. The planned debt reduction using IPO proceeds will further strengthen the company’s financial health, making it more resilient to economic fluctuations.
| FY 2022 | FY 2023 | FY 2024 | 5M FY 2025 | |
| Revenue | 123.65 | 144.54 | 151.55 | 53.37 |
| Expenses | 119.56 | 136.37 | 143.31 | 49.42 |
| Net income | 3.19 | 6.09 | 6.04 | 4.15 |
| RONW (%) | 13.96 | 21.02 | 17.26 | 10.59 |
| EBITDA (%) | 6.4 | 8.1 | 8.0 | 10.73 |
| ROCE (%) | 17.3 | 19.8 | 16.7 | 9.15 |
| Debt/Equity | 0.87 | 0.91 | 0.95 | 0.91 |
The company’s cost of goods sold (COGS) as a percentage of revenue stood at:
- 74.08% in FY 2022
- 70.00% in FY 2023
- 71.65% in FY 2024
Despite fluctuations, the company is working towards optimizing raw material procurement and operational efficiency to enhance profit margins.
#6 Balaji Phosphates IPO Analysis: Robust Distribution Network
Balaji Phosphates has a well-established distribution network spanning across five states. The company works with authorized dealers, wholesalers, and cooperatives to ensure its products reach farmers efficiently. With over 200+ distributors and 5,000+ retailers, the company ensures a strong market presence.
The company has been expanding its logistics infrastructure, utilizing regional warehouses and direct distribution channels to optimize supply chain efficiency. Partnerships with state agricultural bodies and government procurement agencies further enhance its market penetration.
#7 Raw Material Sourcing & Supply Chain
- Rock Phosphate: Sourced from international suppliers in Jordan, Morocco, and Egypt.
- Sulfuric Acid: Procured locally from Madhya Pradesh-based suppliers.
- Packaging & Storage: Finished products are securely packed in durable HDPE bags for safe transportation.
#8 Balaji Phosphates IPO Analysis: Objects of the Issue
The IPO proceeds will be used for:
- Expanding manufacturing capacity to meet growing market demand.
- Debt reduction to enhance financial stability.
- Working capital requirements to ensure smooth operations.
- R&D investments to drive innovation and improve product formulations.
- Brand expansion and marketing initiatives to increase market reach and customer engagement.
#9 Government Policies & Industry Outlook
Allocation for fertilizer subsidy is INR 1.67 lakh crore for 2025-26, lower than the revised estimate of INR 1.71 lakh crore for the ongoing financial year. The government had earmarked INR 1.88 lakh crore for fertilizer subsidy in the previous year. This policy benefits companies like Balaji Phosphates, making their products more accessible to farmers.
Growth Opportunities
- Expanding Product Portfolio: Potential introduction of fortified fertilizers with zinc and boron.
- Geographical Expansion: Plans to penetrate newer markets beyond the current five states.
- Capacity Utilization Improvement: Scaling up production to meet growing agricultural demand.
#10 Comparison of Accounting Ratios: Balaji Phosphate vs Industry Peers
| Company | PE ratio | EPS | RONW (%) | Revenue (Cr.) |
| Balaji Phosphates | 20.65 | 3.39 | 17.26 | 151.68 |
| Coromandel International | 30.57 | 55.81 | 18.9 | 22,289.75 |
| Paradeep Phosphate | 77.23 | 1.22 | 3.28 | 11,643.95 |
| Rama Phosphate | – | (17.56) | (9.39) | 604.18 |
A P/E of 20.65 suggests Balaji is moderately valued compared to Coromandel but much cheaper than Paradeep. Paradeep’s high P/E could indicate overvaluation or future growth expectations. Balaji Phosphate has a solid return on net worth of 17.26%, close to Coromandel’s 18.9%. This means it efficiently generates profits from shareholders’ money. Balaji Phosphate is a smaller but stable player with decent profitability, better than some peers but far behind Coromandel in scale and earnings.
#11 Balaji Phosphates IPO Analysis: Strengths
- Niche Player: Stronghold in SSP and zinc-based fertilizers.
- Growing Market Demand: Rising SSP consumption due to balanced fertilization practices.
- Debt Reduction: IPO proceeds will improve financial health and reduce interest burden.
- Backward Integration: Help mitigate raw material supply risks.
#12 Balaji Phosphates IPO Review: Risks and Threats
- Raw Material Price Volatility: Major inputs (rock phosphate, sulfuric acid) are subject to global pricing.
- Regulatory Changes: Fertilizer subsidies and government policies impact the sector.
- Intense Competition: Faces competition from large players like Coromandel International and Chambal Fertilizers.
- Climate Risks: Unpredictable weather patterns could affect agricultural demand.
Conclusion: Should You Invest?
Balaji Phosphates’ IPO presents an opportunity for investors looking at the agriculture and specialty chemicals sector. With steady revenue growth, a strong market presence, and potential expansion, it is an attractive option. However, investors should consider risks related to input cost volatility and regulatory changes before making a decision.