IPO closes on 18 Mar'26
GSP Crop Science Ltd
Minimum Investment
₹ 14,720 / 46 shares
Our Verdict:
Neutral
- GSP Crop Science Ltd (GSP) operates in the agrochemical sector, which is supported by strong structural demand drivers such as rising food consumption, increasing emphasis on crop protection and the need to enhance agricultural productivity.
- In FY25, the company reported revenue of Rs 1,287.3 crore and a Return on Equity (RoE) of 18.4%, indicating efficient capital utilisation. This RoE is competitive within the sector and compares favourably with most listed peers.
- At the upper price band, the IPO is valued at ~15x FY25 earnings. Relative to peers, this valuation appears reasonable. Larger companies such as PI Industries and Sumitomo Chemical India trade at significantly higher multiples of around 28x–39x, while companies such as Dhanuka Agritech and Excel Industries are available at comparatively moderate valuations.
- However, investors should note that the agrochemical industry is exposed to risks such as weather variability, agricultural cycles and regulatory approvals. The 2026 monsoon is expected to be weaker than last year due to the possible emergence of El Niño conditions, which could impact acreage and consequently reduce demand for insecticides, herbicides and fungicides.
- In addition, rising raw material and freight costs, partly driven by geopolitical tensions in the Middle East, may put pressure on margins and affect near-term profitability.
- Furthermore, broader market sentiment remains weak at present. Historically, IPOs launched during softer market conditions tend to deliver muted listing performance, which reduces the attractiveness of the near-term risk-reward balance.
- Overall, the investment case appears stronger from a long-term perspective rather than for immediate listing gains. A more prudent approach may be to accumulate the stock on dips post-listing, once it settles into a stable range.
About the company
Founded in
12 Feb'85
Managing director
Bhavesh Shah
- GSP is a research-driven agrochemical company engaged in the development and manufacturing of insecticides, herbicides, fungicides and plant growth regulators. In FY25, insecticides contributed 63.02% of sales, followed by herbicides at 17.53%, fungicides at 13.24% and plant growth regulators at 6.22%.
- The company provides crop protection solutions aimed at improving agricultural productivity. Its portfolio includes formulations (combinations of active ingredients and additives) and technicals (concentrated active ingredients), which help control pests, weeds and crop diseases effectively.
- As of September 30, 2025, the company holds 524 product registrations across formulations and technicals within these categories.
STRENGTHS
- Strong Profit Growth: While revenue has grown modestly at around 3%, GSP has delivered significant profitability growth between FY23-25. EBITDA has grown at a CAGR of 42% and net profit from continuing operations has increased at an impressive CAGR of 115%.
- Improving Margins: Profitability has strengthened significantly, with EBITDA margin improving from 6.75% in FY23 to 12.74% in FY25 and further to 16.45% in H1FY26, reflecting operating leverage and a more favourable product mix. Net profit margin has also expanded from 1.46% in FY23 to 9.56% in H1FY26.
- Healthy Return Ratios: GSP demonstrates healthy capital efficiency, with Return on Equity (RoE) at 18.38% and Return on Capital Employed (RoCE) at 19.80% in FY25.
- Large & Diversified Client Base: GSP has established strong relationships with B2B customers in its domestic business, enabling expansion of both product offerings and geographic reach. Its international presence spans 37 countries, including the United States, Uruguay, Brazil, Vietnam, Singapore, UAE and Australia.
- Robust Manufacturing Infrastructure: As of September 30, 2025, GSP operates 5 manufacturing facilities located in Gujarat and Jammu and Kashmir, with an aggregate installed capacity of 15,120 MTPA for technicals and 43,672 MTPA for formulations.
RISK FACTORS
- Raw Materials Dependence: GSP relies significantly on China for raw material imports, which accounted for 42.08% and 37.99% of total purchases for continuing operations in H1FY26 and FY25, respectively. Any disruption in imports from China, could adversely affect manufacturing operations and overall performance.
- Ongoing Legal Cases: The company currently faces 17 criminal misbranding cases related to allegations that certain insecticides did not meet the required active ingredient specifications. Any adverse ruling in these cases may impact the firm’s reputation, business prospects and financial condition.
- High Sales Returns: GSP typically records relatively high product returns, with sales returns accounting for 8.26% and 9.35% of gross revenue from continuing operations in H1FY26 and FY25, respectively. Elevated return levels could adversely affect business prospects and operational performance.
- Low Capacity Utilization: GSP’s Odhav and Samba formulation facilities have experienced low capacity utilization in recent periods. Odhav operated at 9.92% in H1FY26 and 7.37% in FY25, while the Samba facility operated at 25.02% in H1FY26 and 19.94% in FY25. Prolonged underutilization of manufacturing capacity could materially impact business growth prospects and future financial performance.
- Exposure to Weather & Seasonal Risks: GSP’s business is closely linked to the agrochemical sector, which is highly dependent on seasonal patterns and weather conditions. Unfavourable local or global weather patterns could negatively impact demand, operations and financial results.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 400 crore
Fresh Issue
₹ 240 crore
OFS
₹ 160 crore
Price range
₹ 304 - 320
Lot size
46 shares
Issue Objective
The net proceeds from the fresh issue will be utilised for the following purposes:
- Full or partial repayment of certain outstanding secured borrowings of the company; and
- General corporate purposes.
Dates
Bidding open
16 Mar'26
Bidding close
18 Mar'26
Allotment date
20 Mar'26
Refund date
23 Mar'26
Listing
24 Mar'26
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2026 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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