IPO listed on 3 Jul'23
HMA Agro Industries Ltd
Minimum Investment
₹ 14,625 / 25 shares
Grey market premium
₹ 25 (4% premium)
Issue price
₹ 585
Listing price
₹ 625
Listing gains
40 (7%)
Listing on
July 04, 2023
Our Verdict:
Avoid
- Although the company has demonstrated consistent annual earnings growth, however, it is worth noting that its cash flow from operations and operating margins have shown significant volatility during the same period.
- Corporate governance is also in question as the promoters and members of the promoter group are involved in several lawsuits.
- There are no Indian listed companies that are engaged in a similar business, making it difficult to make a comparative analysis. However, with a P/E ratio of 24x based on diluted EPS for FY22, the IPO appears to be fairly valued.
- The grey market premium (GMP) for the issue suggests a flat listing. Therefore, it might be prudent to refrain from this issue for immediate listing gains. Long-term investors should review the company's performance over the coming two quarters before deciding whether to include it in their long-term portfolio or not.
About the company
Founded in
9 Apr'08
Managing director
Wajid Ahmed
- Among the top three frozen buffalo meat exporters, with ~10% market share in the total buffalo meat exports from India
- Approximately 90% of the company’s total revenue is derived from buffalo meat exports and the rest comes from exports of other Agro products
- Recently diversified into Frozen Fish Products, Basmati Rice
STRENGTHS
- Well-diversified reach: Exports its products to 40+ countries under the brands 'Black Gold', 'Kamil' and 'HMA'
- Despite a drop in revenue in FY21, the company has demonstrated consistent growth in net profit over the past three years, thanks to effective expense management
- Over the past three fiscals, the company has reported an average earnings per share (EPS) of Rs 18.8 and an average return on net worth (RoNW) of 28.8%
RISK FACTORS
- Cash flows have been unstable in the past 3 years and debt has been increasing year-after-year, from Rs 169.2 crore in March 2020 to Rs 340.7 crore as at the end of December 2022
- Promoters have secured loans by mortgaging personal properties and providing personal guarantees
- Several lawsuits are pending against the promoters. The books also include contingent liabilities exceeding 100% of total equity, posing potential risk to earnings
Issue details
Issue type
Mainstream
Issue size
₹ 480
Fresh Issue
₹ 150
OFS
₹ 330
Price range
₹ 555 - 585
Lot size
25 shares
Issue Objective
Net proceeds of the issue (fresh issue) will be utilised towards:
- Working capital requirements of the company
- General corporate purposes
Dates
Bidding open
20 Jun'23
Bidding close
23 Jun'23
Allotment date
29 Jun'23
Refund date
30 Jun'23
Listing
3 Jul'23
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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