Analysts are aplit on whether investors should subscribe to the offer.
“There are several legal proceedings pending against the promoters, and the books also include contingent liabilities that may escalate. As a result, the IPO should be avoided from a corporate governance perspective,” said Ravi Singhal, CEO, GCL Broking.
Meanwhile, Avinash Gorakshakar of Profitmart Securities said investors should subscribe for the long term given the niche nature of the business and reasonable valuations. Currently, there are no listed companies in India that engage in a business similar to that of HAM Agro Industries.
“The company has shown some good earnings in FY22 and the run rate in FY23 is also healthy. If we consider the upper price band, the company is at a P/E multiple of 17-18x, which is fine,” he said.
“The annual earnings of HMA Agro Industries have shown robust growth year-over-year. Its exports have also risen amidst the control of many regulatory bodies including APEDA. The IPO seems to be reasonably priced, hence cash surplus investors may subscribe to this IPO from a medium-term perspective,” said Ravi Singh, Vice President and Head of Research, ShareIndia Securities.
Ahead of the subscription, the company raised Rs 144 crore from anchor investors, wherein it offered 24.61 lakh shares to the investors.The IPO comprises a fresh issue of shares of up to Rs 150 crore and an offer for sale (OFS) of Rs 330 crore by promoters and selling shareholders.
The company has fixed a price band of Rs Rs 555-585 per equity share for the public offer. Investors can bid for a minimum of 25 equity shares and in multiples thereafter.
About 50% of the offer is reserved for qualified institutional buyers, 15% for non-institutional investors and the remaining 35% for retail investors.
Ahead of the subscription, the company’s shares were commanding a premium of Rs 28 in the unlisted market.
HMA Agro Industries is a leading export house and is one of the largest exporters of buffalo meat in India accounting for more than 10% of India’s export of frozen buffalo meat. Its products are self-branded, packaged and exported to over 40 countries.
The company proposes to utilise the net proceeds of the fresh issue for funding the working capital requirements of the company and other general corporate purposes.
Based on the upper end of the price band, the company commands a market valuation of Rs 2,929 crore.
On listing, HMA Agro will be India’s first major frozen buffalo meat exporter to go public.
Aryaman Financial Services is the sole Book Running Lead Manager, and Bigshare Service is the Registrar issue. The shares of the company will be listed on BSE and NSE.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)