The Rs 480-crore initial share sale of HMA Agro Industries opened for public subscription on Tuesday (June 20) and will conclude on Friday (June 23). Shares of HMA Agro Industries are commanding a premium of Rs 24 in grey market today, according to market observers. This was lesser than a GMP of Rs 28 level on Monday (June 19).
However, it is important to note that grey market premiums are just an indicator as to how the company's shares are stacked up in the unlisted market and are subject to change rapidly.
HMA Agro Industries has fixed a price band of Rs Rs 555-585 per equity share for the IPO (initial public offer). Investors can bid for a minimum of 25 equity shares and in multiples thereafter.
Should you subscribe?
Ravi Singhal, CEO of GCL Broking said that there are several legal proceedings pending against the promoters, and the books also include contingent liabilities that may escalate. As a result, Singhal believes, the IPO should be avoided from a corporate governance perspective.
The initial share sale comprises a fresh issue of equity shares up to Rs 150 crore and an offer for sale (OFS) of Rs 330 crore by promoters and selling shareholders, which means nearly 70 percent of the money from the issue is going to promoters.
Wajid Ahmed, Gulzar Ahmad, Mohammad Mehmood Qureshi, Mohammad Ashraf Qureshi, Zulfiqar Ahmad Qurashi, and Parvez Alam are the promoters who are participating in the OFS.
Nearly 50 percent of the issue is reserved for qualified institutional buyers (QIBs), 15 percent for non-institutional investors and the remaining 35 percent for retail investors.
Anchor investment, listing date
The company has mobilised Rs 144 crore from several anchor investors ahead of its IPO launch. In a regulatory filing, the firm said that it has finalised the allocation of 24.61 lakh shares to anchor investors, at a price of Rs 585 per share, the upper price band.
Investors, who participated in the anchor book, included Craft Emerging Market Fund PCC, Minerva Ventures Fund, Forbes EMF, Coeus Capital Opportunities Fund, Radiant Global Fund and Absolute Returns Scheme.
Craft Emerging Market Fund PCC is the biggest investor among them, investing Rs 70 crore in HMA Agro via Citadel Capital Fund, and Elite Capital Fund.
The share allotment will likely be finalised on June 29 and the listing of shares on the BSE and NSE will be on July 4.
At the upper end of the price band, the frozen buffalo meat exporter commands a market valuation of around Rs 2,929 crore.
The company proposes to utilise the proceeds from the fresh issue on working capital requirements and general corporate purposes.
Aryaman Financial Services Ltd is the sole lead manager to the issue, while Bigshare Services is the IPO registrar.
Financials
The company has posted a 64.3 percent increase in profit at Rs 117.6 crore for fiscal FY22, despite a weak operating margin. HMA Agro Industries' revenue rose significantly by 80.6 percent to Rs 3,083.2 crore in the same period, partly on a low base in the previous year.
At the operating level, the EBITDA, or earnings before interest, tax, depreciation and amortisation, surged by 23.8 percent to Rs 120 crore compared to the previous year, but the margin dropped 170 basis points to 3.9 percent in FY22.
In the nine-month period ended December FY23, the company reported a profit of Rs 113.2 crore on revenue of Rs 2,370.5 crore, with EBITDA at Rs 117.9 crore and margin at 4.97 percent.
First Published: Jun 19, 2023 4:53 PM IST
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