HMA Agro Industries IPO Opens Today: Should You Subscribe?

The public offering for HMA Agro Industries, which aims to raise Rs 480 crore via IPO, opens today. The price range for the public offering is between Rs. 555 and Rs. 585 per equity share. The public issue began today and will accept bids till June 23rd, 2023. A bidder will be able to submit applications in lots, with each lot consisting of 25 shares hence the minimum amount needed to subscribe for the issuance is Rs 14,625. The public offering is expected to list its shares on the BSE and NSE on July 4, 2023.

Bigshare Services Pvt Ltd has been appointed as the official registrar of the IPO and Aryaman Financial Services Limited is serving as the lead manager. Share allocation of HMA Agro Industries IPO is expected to be done on 29th June 2023. The IPO consists of an offer for sale (OFS) of 330 crore rupees by the promoters and selling shareholders, as well as a fresh issue of up to Rs 150 crore worth of shares. Parvez Alam, Zulfiqar Ahmad Qurashi, Mohammad Ashraf Qureshi, Wajid Ahmed, and Gulzar Ahmad are the promoters participating in the selling offer.

Approximately 50% of the offer is set aside for qualified institutional buyers (QIB), 15% is allocated to non-institutional investors, and the remaining 35% is allocated to retail investors. Prior to the subscription, the company received Rs 144 crore from anchor investors. As part of the transaction, it sold the investors 24.61 lakh shares for Rs 585 each.

As per the grey market, the grey market premium (GMP) of HMA Agro Industries IPO today is Rs 24. The expected listing price for the HMA Agro Industries IPO is Rs 609 (cap price plus today's GMP), taking the Rs 585 pricing range into account. Accordingly, based on today's GMP and market observers, the issue is anticipated to be listed at an upside premium of 4.10% on its listing day.

HMA Agro Industries IPO Details

According to Manish Khanna, Co-Founder, Unlisted Assets, here are the facts to know about HMA Agro Industries IPO:
HMA Agro Industries Limited is one of the three top exporters of frozen buffalo meat and this segment is under regulatory norms with regulators like APEDA, FSSAI, SGS, QMS, EMS FSMS etc.

• Its total revenue has over 91% of exports of buffalo meat and the rest on exports of agro products.

• There is a hue and cry for this IPO because of an uproar about this company's business on cow meat, the management clarified this and said that they do not have anything related to cows

• The company has a well-established distribution channels across 40 countries, the company has recently diversified its product portfolio by adding Frozen Fish Products, Basmati Rice and planning to start Poultry and other Agri products as business verticals.

• On the financial performance part, for the last three fiscals, HAIL has (on a consolidated basis) 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). For 9M of FY23, it earned a net profit of Rs. 113.24 cr. on a turnover of Rs. 2417.82 cr. Though the company suffered a minor setback in top line during the pandemic year, it posted improved margins. With a new fully integrated plant and equipment, it is aiming to maintain growth in its margins going forward.

• The company has increased its PAT Y-O-Y, which is a good indicator for its future performance.

• The GMP of the company was observed at Rs. 24 as on 20th June 2023. Considering the upper band price of Rs. 585, the company could give listing gains to the investors

Should You Subscribe HMA Agro Industries IPO?

Nirav Karkera, Head of Research, Fisdom said "The company has been exhibiting a healthy business growth trajectory. However, financial health remains a matter of concern. Growing leverage and associated context such as personal guarantees and mortgage to avail such debt raises concerns. It is imperative to watch the business for any positive developments on the balance sheet health front. Most such developments are expected to be priced in post listing. Investors would be better off to analyse such trends before making an investment decision."

A R Ramachandran, Co-founder & Trainer - Tips2trades said "Even though valuation wise, PE ratio & ROE are very good, rising debt-equity ratio could limit upside in the stock price post listing. Investors can subscribe for listing gains only."

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.