Company and IPO Overview:
HMA Group has been in the meat industry since over four decades. HMA Agro Industries Limited is the flagship company of the group and is a star export house recognized by Government of India. It is currently among the largest exporters of frozen buffalo meat products from India and it accounts for more than 10% of India’s total export of frozen buffalo meat.
Its products are mainly packaged under the brand name “Black Gold”, “Kamil” & “HMA” and exported to over 40 countries all over the globe. The company, HMA Agro Industries Limited only deals in buffalo meat and allied products. Unlike beef or pork, buffalo meat is free from religious constraints and has the added advantage of low fat and cholesterol. The meat produced for export is in the form of deboned and deglanded frozen halal buffalo meat.
The facilities have been licensed for export to the United Arab Emirates, Iraq, Saudi Arabia, Oman, Bahrain, Jordan, Algeria, Egypt, Angola, Vietnam, Indonesia, Georgia, Malaysia, Cambodia, and other Middle Eastern, CIS, and African countries, among others. Exports account for around 90% of the company's sales.
It has lately broadened its product range by adding Frozen Fish Products, Basmati Rice, Poultry, and other agri products as business verticals in order to capitalize on its solid export business and well-established distribution systems over 40 countries. The company intends to become one of India's most well-known food product exporters.
HMA Agro Industries Limited is a new mainboard IPO coming and it is going to raise around ₹ 480 crores via IPO that comprises offer for sale (OFS) up to ₹ 330 crores and fresh issue upto ₹150 crores. The retail quota is 35%, QIB is 50%, and HNI is 15%. The price band of the issue is ₹555 to ₹585 with a minimum market lot of 25 shares.
Financials (rounded off):
Date | Total Revenue (₹ in cr) | PAT (₹ in cr) |
31/03/2020 | 2416 | 46 |
31/03/2021 | 1720 | 72 |
31/03/2022 | 3139 | 117 |
Objectives of the Issue:
The objects of the net fresh issue are to raise funds for:
1. Working capital requirements of the company, and
2. General corporate purpose.
IPO Details:
IPO Date | 20/06/2023-23/06/2023 |
Face Value | ₹10 per share |
IPO Price Band | ₹555-₹585 per share |
IPO Lot Size | 25 Shares |
Listing at | NSE, BSE |
Basis of Allotment | 29/06/2023 |
Credit of Shares in Demat | 03/07/2023 |
Listing Date | 04/07/2023 |
Pre-Issue Shareholding | - |
Post-Issue Shareholding | - |
Retail Minimum Lot Size | 25 shares (₹14,625) |
Valuations & Margins:
Indicators | FY 20 | FY 21 | FY 22 |
EPS | 9.66 | 15.07 | 24.39 |
P/E | - | - | 22.76-23.99 |
EBITDA (%) | 3.31 | 6.47 | 5.7 |
Debt/Equity | 0.9 | 0.7 | 0.88 |
ROCE (%) | 36.58 | 39.16 | 42.15 |
Important things to note:
Top reasons to consider the IPO:
1. Long standing relations with customer base:
The company has a diverse customer base spanning across various geographic regions around the world. It prides itself on its high production quality and a well-established setup.
2. Well-established brand:
The company is a prominent player in the Indian meat export industry and ranks among the top three meat exporter companies. It successfully exports its products under the renowned brands "Black Gold," "Kamil," and "HMA" to over 40 countries worldwide.
3. Global presence:
The company serves both domestic and international markets.
Risk factors to watch out in the IPO:
1. Certain legal proceedings:
The promoter/director, subsidiaries, and group companies are involved in ongoing legal proceedings. Any unfavorable outcome in these proceedings could significantly impact the business.
2. Highly regulated and sensitive business:
The company operates in a highly regulated industry that is sensitive to environmental and religious considerations. Failure to effectively manage statutory requirements and ensure the operational efficiency of its processing units may have an impact on the business.
3. Unsecured loan:
The company has obtained an unsecured loan of Rs 88.15 million on a consolidated basis, which is repayable upon demand. Any request from the lenders for repayment of this unsecured loan could impact the cash flow and financial condition of the company.
4. No long-term agreements with suppliers:
The company lacks long-term agreements with suppliers for raw materials, particularly livestock, which could result in increased costs or a shortage in the availability of such raw materials.
Crisp Insights:
Current Grey Market Premium is ₹30.
Disclaimer: All information is provided for educational and informational purpose only. Data is fetched from publicly available sources such as the DRHP filed by the company. The website or the author takes no guarantee for the accuracy of the data however, we have tried our best to present accurate data to out readers. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.
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