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  • Writer's pictureJatin Agarwal

Indong Tea IPO


Company and IPO Overview


Indong Tea Company Limited incorporated in the year 1990,and therefore is an established player in the segment. Indong Tea Company Limited currently operates a Tea Garden under Government lease and is engaged in Tea Plantation & Manufacturing of CTC Tea at Indong Tea Estate situated in Jalpaiguri District of West Bengal.


The Indong Tea Estate is spread over an area of 740.38 Hectares comprising of Tea Plantation, Tea Factory, Withering Trough House, Officer’s Bungalows, Staff Quarters, Labour Quarters, Pump House, General Stores, and Dairy Farm etc.


In the year 2014, the Company was taken over by Asian Group promoted by Sri Hariram Garg. Under his Leadership, the company is now economically viable because of massive investments in all spheres while at the same time taking a keen interest in the welfare of the workers. He invested fresh capital and installed new machinery which resulted in high yield from the plantations produced.


Indong Tea Company is a BSE SME IPO to raise ₹13.01 crores via IPO. The Indong Tea Company IPO price band is fixed at ₹26 with a market lot of 4000 shares. The company has reserved a quota of 50.00% for NII and 50.00 % for Retail Investors in this IPO.



Financials (rounded off)

Date

Total Revenue (₹ in cr)

​​​PAT (₹ in cr)

​31/03/2020

16.73

(1.21)

31/03/2021

23.13

1.28

31/03/2022

19.93

1.32

Objectives of the Issue

  • Undertaking Cap-ex for Extending, Uprooting, and Infilling of Tea Plantation at Indong Tea Estate, Jalpaiguri, and West Bengal.

  • Injecting funds for installation of additional plant and machinery for Tea Processing Unit at Indong Tea Estate, Jalpaiguri, West Bengal.

  • Channelize funds to meet working capital requirements to ensure smooth functioning .

  • Meet public issue expenses.


IPO Details

IPO Date

09/02/2023-13/02/2023

Face Value

₹10 per share

IPO Price Band

₹26 per share

IPO Lot Size

4000 Shares

Listing at

BSE SME

Basis of Allotment

16/02/2023

Credit of Shares in Demat

20/02/2023

Listing Date

21/02/2023

Pre-Issue Shareholding

96.09%

Post-Issue Shareholding

64.03%

Retail Minimum Lot Size

4000 shares (₹1,04,000)


Indong Tea Valuations and Margins:

FY20

FY21

FY22

EPS (Rs.)

(2.37)

2.5

2.12

P/E

-

-

12.26

ROCE (%)

2.0

10.0

8.0

EBITDA (%)

9.84

18.32

18.83

Important things to note about the company:

Company Strengths:

  • The company has well defined organizational structure, Rich management experience and skilled team.

  • Indong ltd has reliable Supply chain system.

  • Customer Centric Business Model.

  • The company has ISO Certification ensuring no quality compromise.

However there are other aspects to be taken care of before you apply to this IPO , some are as follows :

  • This issue was revoked during September 2022 due to lack of demand at issue price of Rs. 26, the company is trying to capture market for the second time.

  • Direct Tax liability of Rs. 9 crores is an eye opener for Retail investors. As 13 Cr IPO will be used to fund tax demands which are not disclosed in the Red herring prospectus.

  • Loan On Books is approximately Rs. 9 crores which is quite alarming.

  • Stag Revenue. Revenue has not grown much and PAT delivery is only 1-1.15 crores, makes issue overvalued.

  • Too many related party transactions, creates great confusion.

  • 97% Revenue from top 5 customers, so the revenue source is quite concentrated.


Crisp Insights:

  • Adani Stocks have made the broader markets weak, hence, any negative news there can severely impact these small IPOs

  • Grey Market Premium is Rs. 4 per share.


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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