HMA Agro Industries Ltd IPO - Details, Objectives and Share Price
Introduction
Favorable market conditions and a slew of Initial Public Offerings (IPOs) have kept investors busy in June 2023. HMA Agro Industries Limited – one of the leading companies in the Indian meat industry – is also launching its IPO this month.
In this article, we will review the details of the HMA Agro Industries Ltd. IPO and analyse the company’s strengths and weaknesses for you to make an informed investment decision. Keep reading.
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About the Company:
HMA Agro Industries is engaged in trading and handling food and agro products, including frozen meat, natural vegetables, and cereals. The company was incorporated in 2008 and is currently among India's leading exporters of frozen buffalo meat products, accounting for over 10% of the country’s total export.
The company’s products are primarily packaged under the brand names “Black Gold”, “Kamil”, “HMA”, and “Fresh Gold”, and are exported to more than 40 countries in the world. It has four fully integrated packaged meat processing units in Aligarh (Uttar Pradesh), Mohali (Punjab), Agra (Uttar Pradesh), and Parbhani (Maharashtra). It is in the process of setting up a fifth unit in Haryana. Stay updated on the latest Upcoming IPO 2023!
Strengths of the Company:
- The company is known to maintain a high standard of production for over four decades
- It has a network of around 25,000 employees across marketplaces
- It has developed strong relations with distributors all over the world
- It is one of the most prestigious and well-known names in its industry
- It has expanded its reach to well-diversified global markets, including United Arab Emirates (UAE), Iraq, Saudi Arabia, Egypt, Indonesia, and several African countries
Weaknesses of the Company:
- Almost 90% of the company’s sales are achieved through exports. A lack of domestic market penetration can become a risk
- A significant portion of the company’s revenue is generated from the meat business. Any reduction in demand or supply can create an adverse impact
- The top 10 clients of the company provide 36% of its revenues. Any feud or disintegration may lead to a big loss
- It operates in an industry requiring several statutory and regulatory permits from the government and other agencies such as PETA and APEDA
- It does not have long-term agreements with its suppliers. This may lead to a shortfall of raw materials during crises
- Certain subsidiaries of the company have reported losses during the last three fiscal years
HMA Agro Industry IPO Details:
As per the details available to the public, the total issue size of the HMA Agro Industries Ltd. IPO will be Rs. 480 crores, including a fresh issue of Rs. 150 crores and an offer for sale of Rs. 330 crores. Around 50% of the IPO has been reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and the remaining 35% for retail investors.
The IPO price band has been fixed between Rs. 555 to Rs. 585 per share. The IPO will remain open for public subscription from 20th June 2023 to 23rd June 2023. Investors can place their bids during this period for a maximum of 13 lots with each lot containing 25 equity shares. The allotment will be finalized via a lottery on 29th June 2023 and the shares are expected to get listed on the stock exchanges on 4th July 2023.
Financial Snapshot:
If we glance at the company’s financials, its net worth has increased from Rs. 187 crore in March 2020 to Rs. 453 crore in December 2022. Similarly, the company's revenues have grown from Rs. 2,417 crores in March 2020 to Rs. 3,139 crores in March 2022. Despite a nominal downfall in the company’s revenue in FY 2020-21, the Year-on-Year (YoY) profit has increased.
The table below depicts a snapshot of the company’s financials since March 2020:
| Particulars | For the Period Ending December 31, 2022 | As of and For FY Ending March 31 | ||
| 2022 | 2021 | 2020 | ||
| Share Capital | 48 | 48 | 4 | 4 |
| Net worth | 453 | 375 | 259 | 187 |
| Total Borrowings | 341 | 330 | 181 | 169 |
| Revenue from Operations | 2418 | 3139 | 1720 | 2417 |
| Profit After Tax | 113 | 118 | 72 | 46 |
| Earnings per Share (diluted) | 23 | 24 | 15 | 10 |
| Net asset value (In Rs/share) | 95 | 79 | 54 | 39 |
| Return on Net worth (%) | 32% | 31% | 28% | 25% |
*Amount in Cr except per share
Should You Subscribe?
There is a reasonable bustle among investors regarding the HMA Agro Industries Ltd. IPO. Considering its YoY growth in terms of annualized sales and profits, it seems justified as well. But as an informed investor, one must analyze the company’s strengths, weaknesses, and prevailing market conditions before making an investment decision. If you need a Demat account for investing, you can open it for free with Motilal Oswal.
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