HMA Agro Industries plans IPO to open on 20thth Closed on June 23rdrd June 2023. In this article, we provide 10 essentials for HMA Agro IPOs, offer targets, and a HMA Agro Industries IPO review.
HMA Agro IPO – 10 Important Things Investors Should Know
Let’s summarize HMA Agro Industries IPO Learn more about 10 key things investors should understand.
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#1 – About HMA Agro Industries Limited: A Leader in the Meat Industry
HMA Group is a leading company in the meat industry with over 40 years of history. The company is a major exporter of frozen buffalo products from India, accounting for more than 10% of the country’s total exports in this sector. Under the brand names “Black Gold”, “Kamil” and “HMA”, the company’s products are sold in more than 40 countries around the world. The company specializes in water buffalo meat and related products, offering a halal-certified, low-fat, cholesterol-free alternative.
HMA Group operates four fully integrated packaged meat processing plants located in Aligarh, Mohali, Agra and Parbani. They are also in the process of setting up his fifth processing facility in Haryana and plan to acquire an additional factory in Unnao. With these expansions, in-house meat processing capacity is expected to exceed 400,000 tonnes per year across its six plants by 2023-24. In addition, he owns two secondary level meat processing facilities in Jaipur and Manesar. The company sources raw materials and processes them into finished products through subsidiaries and third-party processing units. These products are exported through established distribution channels.
HMA Group has a track record of strong financial performance. Total revenue for the nine months ended December 31, 2022 and for fiscal years 2022, 2021 and 2020 was substantial. The company’s profitability is reflected in its after-tax profit and EBIDTA numbers, which have shown consistent growth over the years. HMA Group has strategically shifted its focus to higher-margin markets and as a result, its EBIDTA margin improved from its 3.25% in FY2020 to over 5.60% in FY2022.
#2 – Company Competitiveness
Production quality and established set-up: The company prioritizes high quality standards, adheres to strict parameters and follows international standards and certifications.
Experienced Management Team: Our promoters and management team have extensive industry experience and are able to identify opportunities and effectively adapt to market changes.
Long-standing customer relationships and established marketing structure: The company has a customer-centric business model focused on lasting customer relationships and quality, timely delivery and expansion into new markets. increase.
Established Brand: The company offers products under recognized brand names and benefits from brand recall and customer loyalty.
Well-diversified market reach: The company exports its products to more than 40 countries, reducing its dependence on a single market and ensuring a wide geographical presence.
#3 – HMA Agro Industries IPO Date, Price and Size
|IPO start date||June 20, 2023|
|IPO deadline||June 23, 2023|
|IPO Listing Date||July 4, 2023|
|Kind of problem||Book Built Issue IPO|
|face value||10 rupees per share|
|IPO price range||Rs 555 to Rs 585 per share|
|lot size||25 shares|
|Minimum order quantity||25 shares|
|exhibition place||BSE and NSE|
|total issue size||Rs.480 million|
|Latest issue||Rs.150 million|
|Offer of QIB shares||50% or more of the offer|
|Offer of NII/HNI shares||No more than 15% of the offer|
|retail shares sold||No more than 35% of the offer|
#4 – What is the target of the HMA Agro IPO?
The IPO targets are OFS and fresh issuance:
OFS – Selling shareholders will be selling their own shares and the company will not benefit from the offer.
The new issuance will be used for a) the company’s working capital requirements and b) general corporate purposes.
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#5 – How is the financial performance of the company?
Here is the financial situation of the company.
|Fiscal year end/end (amounts in billions)|
|detail||2019||2020||21st year||22nd year|
|Profit after tax||31.2||45.9||71.6||117.6|
#6 – What are the HMA Agro IPO dates and key events?
|IPO start date||Tuesday, June 20, 2023|
|IPO deadline||Friday, June 23, 2023|
|Basis for allocation||Thursday, June 29, 2023|
|Initiate refund||Friday, June 30, 2023|
|Credit of shares to Demat||Monday, July 3, 2023|
|Listing date||Tuesday, July 4, 2023|
|UPI Obligation Verification Deadline Time||June 23, 2023 at 5:00 PM|
#7 – Is HMA Agro Industries IPO Valuation Expensive?
- The IPO price range is from Rs 555 to Rs 585.
- Considering last year’s 2022 EPS was Rs 24.39, the P/E ratio is 24x.
- Taking into account the weighted EPS of Rs 18.83 over the last three years, the PER is 31x.
- 18.83 PER is multiplied by 31 when annualized over the 9 months December through 22nd.
- Since there are no listed companies in the same industry, it is not possible to determine whether the issue price is overvalued or undervalued. However, considering the 24x to 31x P/E ratio, the stock is a complete gainer.
#8 – HMA Agro Industries IPO Risks/Downsides
- Legal proceedings: We are currently in litigation and any unfavorable outcome could have a material adverse effect on our business, financial condition and results of operations.
- Dependence on meat business: A decrease in demand or production of meat products could adversely affect our business, financial performance and overall financial health.
- Corporate compliance: Failure to obtain necessary permits and comply with regulations could adversely affect our operations and business activities.
- Environmental and regulatory challenges: Violations of legal requirements can lead to factory closures, suspensions, penalties and fines, and damage our business reputation.
- Lack of experience in new business: Limited experience with new business could result in reduced investment returns and financial losses, which could adversely affect our overall business, financial condition and cash flow.
- Expansion plan: Potential delays and cost overruns may affect our proposed expansion plans, especially for new processing facilities.
- Subsidiary losses: If our subsidiary suffers losses, it may adversely affect our consolidated results.
- Financial vulnerabilities of group companies: Some group companies have reported losses and negative net worth, raising concerns about their financial stability and impacting our overall financial health.
- Lack of long-term supplier contracts: Without long-term contracts with our suppliers, we could experience increased costs and raw material shortages, which could affect our operations and profitability.
- Counterfeit and counterfeit goods: Dealing with counterfeit, cloned and passing products risks loss of sales and damage to our brand reputation.
- Transactions between related parties: Transactions with related parties may involve conflicts of interest with shareholders and require transparency and governance measures.
#9 – HMA Agro Industries Ltd. IPO GMP
Some now argue that the company’s trading flat is between 10% and 12% of HMA Agro Industries’ IPO GMP today.
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#10 – HMA Agro Industries IPO Review – Should You Invest?
Based on the above analysis, is it good or bad to invest in HMA Agro Industries IPO?
The company has a strong presence in the meat industry and a history of solid financial performance. HMA Agro Industries aims to leverage its established market position with a diversified product portfolio and expansion plans.
However, investors should carefully assess IPO valuations given the lack of comparable publicly traded peers. Investors should be aware of several risks associated with HMA Agro Industries. These include ongoing legal proceedings that could adversely affect the company’s business and financial condition; reliance on the meat industry that leaves it vulnerable to changes in demand; and avoiding business disruptions and fines. including the importance of regulatory compliance for In addition, factors such as limited experience with new businesses, potential delays in expansion plans and cost overruns, and risks associated with subsidiaries and counterfeit products should be considered before making an investment decision.
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