HMA Agro Industries IPO: All You Need to Know about the Public Offering.

Rajesh
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HMA Agro Industries, a leading exporter of frozen buffalo meat, has initiated its initial public offering (IPO) to raise Rs 480 crore. The IPO, which opened today, offers equity shares at a price range of Rs. 555 to Rs. 585 per share. Here's a comprehensive overview of the HMA Agro Industries IPO and key details you should know.


Key Details of HMA Agro Industries IPO:

- IPO Dates: The public issue began today and will accept bids until June 23rd, 2023.

- Lot Size: Bidders can submit applications in lots of 25 shares, requiring a minimum subscription amount of Rs 14,625.

- Listing: The shares of HMA Agro Industries are expected to be listed on the BSE and NSE on July 4, 2023.

- Registrar: Bigshare Services Pvt Ltd has been appointed as the official registrar of the IPO.

- Lead Manager: Aryaman Financial Services Limited is serving as the lead manager.

- Share Allocation: The IPO comprises an offer for sale (OFS) of Rs 330 crore by the promoters and selling shareholders, along with a fresh issue of up to Rs 150 crore worth of shares. The share allocation is expected to be done on June 29th, 2023.

- Promoters: The selling offer involves participation from promoters Parvez Alam, Zulfiqar Ahmad Qurashi, Mohammad Ashraf Qureshi, Wajid Ahmed, and Gulzar Ahmad.

- Allocation Breakdown: Approximately 50% of the offer is reserved for qualified institutional buyers (QIB), 15% for non-institutional investors, and the remaining 35% for retail investors.

- Anchor Investors: Prior to the subscription, the company raised Rs 144 crore from anchor investors by selling 24.61 lakh shares at Rs 585 each.

Grey Market and Expected Listing Price:

The grey market premium (GMP) for HMA Agro Industries IPO is currently Rs 24. Based on today's GMP and market observers, the expected listing price is estimated to be Rs 609 (cap price plus GMP), considering the pricing range of Rs 585. This suggests an anticipated upside premium of 4.10% on the listing day.

HMA Agro Industries Company Overview:

- Business Focus: HMA Agro Industries is a key player in the frozen buffalo meat export industry, complying with regulatory norms set by APEDA, FSSAI, SGS, QMS, EMS FSMS, and others.

- Revenue Streams: Over 91% of the company's total revenue comes from the export of buffalo meat, while the remaining portion is generated from agro product exports.

- Diversification and Distribution: The company has a well-established distribution network spanning 40 countries. Recently, HMA Agro Industries expanded its product portfolio by adding Frozen Fish Products and Basmati Rice. It also plans to venture into poultry and other agri products.

- Financial Performance: On a consolidated basis, HMA Agro Industries posted a turnover/net profit of Rs. 2416.61 cr./Rs. 45.90 cr. (FY20), Rs. 1720.40 cr./Rs. 71.60 cr. (FY21), and Rs. 3138.98 cr./Rs. 117.62 cr. (FY22). As of 9M FY23, it achieved a net profit of Rs. 113.24 cr. on a turnover of Rs. 2417.82 cr. Despite facing some challenges during the pandemic, the company demonstrated improved margins and aims to maintain growth with its new integrated plant and equipment.

- Positive Indicators: HMA Agro Industries has shown consistent year-on-year growth in its profit after tax (PAT), indicating a promising future performance.

Expert Opinions on Investing:

- Nirav Karkera, Head of Research at Fisdom, emphasizes the company's healthy business growth trajectory. However, he advises cautious consideration of its financial health due to growing leverage and associated concerns.

- A R Ramachandran, Co-founder & Trainer at Tips2trades, suggests that investors can subscribe to HMA Agro Industries IPO for potential listing gains, considering the favorable valuation metrics. However, he highlights the rising debt-equity ratio as a factor that may limit the stock's upside post-listing.

Disclaimer: 

The recommendations mentioned above are provided by market analysts and do not represent the views of the author or Greynium Information Technologies. Neither the author, the brokerage firm, nor Greynium can be held responsible for any losses incurred based on the information provided. It is advised to consult certified experts before making any investment decisions.

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