HMA Agro IPO | Overview, Valuation, GMP & Strengths

HMA Agro Industry - Complete Overview

For over four decades, HMA Agro Industry has been a prominent player in the meat industry. Renowned for its expertise in exporting frozen buffalo meat, the company has established its presence in India and more than 40 countries.

HMA Agro Industry alone accounts for a remarkable 10% of the country's total meat exports. Diversifying its offerings, HMA Agro Industry is also involved in the production of frozen natural products, vegetables, and cereals within India.

With self-branded and carefully packaged products, the company ensures quality and consistency across its range. With a workforce of approximately 25,000 employees, HMA Agro Industry operates in more than 10 offices and 5 facilities throughout India.

Its four fully integrated packaged meat processing plants located in Aligarh, Mohali, Agra, and Parbhani exemplify the company's commitment to efficiency and excellence.

To fuel further growth, HMA Agro Industry is now planning to establish fully integrated
meat product processing units in Haryana and Unnao, respectively, expanding its in-house processing capacities to over 400,000 metric tons per annum.

What does the company do?

The company is engaged in the global export of frozen buffalo meat to numerous countries, boasting a presence in over 40 nations. It proudly asserts its position as one of the largest exporters of buffalo meat in India.

Company products

The company is involved in exporting frozen fresh de-glanded buffalo meat, prepared/frozen natural products, vegetables, and cereals. Furthermore, the company has expanded its business to include the export of marine products, with frozen fish serving as a key product in its portfolio.

 

 

IPO Overview

HMA Agro Industries upcoming IPO includes a fresh issue of equity shares worth up to Rs 150 crore, as well as OFS of Rs 330 crore by promoters and selling shareholders. This IPO presents a good opportunity for investors to participate in the growth of this renowned company.

In the industry of frozen buffalo meat exports, HMA Agro stands tall as a true market leader in India. The company not only commands a significant 10% share of the country's meat exports but also enjoys the coveted status of a monopoly.

With fully integrated packaged meat processing plants already established in four major Indian cities, the company's expansion plans include the opening of two additional plants in different cities. 

The company has set the price band for the IPO at Rs 555-585 per equity share, making it accessible to a wide range of investors. Each lot will consist of 25 shares and interested investors can bid for a minimum of 1 lot and a maximum of 13 lots.

Opening on June 20th, the IPO subscription will be closed on June 23rd, providing investors with a limited time to participate. The shares of HMA Agro Industries will be listed on both the NSE and BSE exchanges, ensuring broader market accessibility and liquidity.

In terms of allocation, the IPO has reserved 50% of the shares for qualified institutional buyers, 15% for non-institutional investors, and the remaining 35% for retail investors. This distribution ensures a fair and balanced opportunity for various categories of investors.

 

HMA Agro Industries IPO timetable (Tentative Dates)

Events	Tentative Dates
IPO Opening Date	20 June 2023
IPO Closing Date	23 June 2023
IPO Allotment Date	29 June 2023
Refund Initiation	30 June 2023
IPO Listing Date	4 July 2023

 

HMA Agro Industries IPO Details

IPO opening & closing date	20 June to 23 June 2023
Face Value	Rs 10 per equity share
Issue Price	Rs 555-585
Lot Size	25 shares per lot
Price of 1 lot	Rs 14625
Issue Size	Rs 480.00 crore
Offer for sale	Rs 330.00 crore
Fresh issue	Rs 150.00 crore
Listing at	BSE, NSE
Issue Type	Book build issue
Registrar	Bigshare Services

 

HMA Agro Industries IPO Lot Details

Minimum Lot Investment (Retail)	1 lot per investor
Maximum Lot Investment (Retail)	13 lot per investor
Minimum Lot Investment (HNI)	14 lot per investor
Maximum Lot Investment (HNI)	68 lot per investor

 

HMA Agro Industries IPO Reservation

Institution portion	50% of the offer
Non-institution portion	15% of the offer
Retail portion	35% of the offer

 

Company Financials

Amount in Crores

Period	FY 20	FY 21	FY 22
Total Assets	472.85	572.04	856.11
Total Revenue	2416.61	1720.40	3138.98
Net Profit	45.90	71.60	117.62
Net Worth	187.05	258.69	374.65
Reserve & Surplus	183.32	254.92	327.03
Total Borrowing	169.13	181.34	330.02

 

Objective of the Issue

In order to ensure seamless operations and meet various corporate needs, the company is actively seeking ways to generate additional working capital.

 

Promoters And Management of HMA Agro Industry

HMA Agro, a prominent company in the meat export business, is backed by a team of experienced individuals. Gulzar Ahmed, Wajid Ahmed, and Gulzeb Ahmed serve as key members of the company.

Gulzar Ahmed, the chairman of HMA Agro, possesses extensive knowledge and a three-decade-long experience in the industry. Through his dedication and expertise, he has successfully transformed a small company into one of India's leading meat exporters.

In April 2013, Wajid Ahmed was appointed as the Managing Director of the company. With 16 years of experience in the meat industry, he efficiently oversees the management of capital expenditures, including machinery, equipment, and packaging machines. Wajid ensures the smooth functioning of the company's processing units.

Joining the Board of the Company on June 3, 2021, Gulzeb Ahmed brings eight years of business experience to HMA Agro. He also holds the position of CFO in the company since July 8, 2021. 

 

Peer Comparison

This company enjoys a monopoly in its industry, with no other listed companies in India operating within the same sector.

 

IPO's Valuations

The company's diluted EPS for FY22 corresponds to a P/E ratio of 23.99, while Nifty's P/E stands at 21.59. At the higher range of the price band, the company holds a market valuation of Rs 2,929 crore.

 

Dividend Policy

In FY20, the company paid a dividend of 7%. However, it did not pay any dividends for FY21 and FY22. It resumed dividend payments for FY23 and paid a dividend of 20% until the filing of the offer documents. Based on the financial performance and future prospects the company is planning to implement a judicious dividend policy after listing.

 

IPO's Strengths 

• Well-established operational facilities.
• Unwavering commitment to production excellence.
• Holding a prominent position as one of the leading global exporters.
• A formidable international footprint.
• Cultivating a loyal customer base and extensive network.
• Trust and confidence of clients for over four decades.
• A seasoned team and pursuing strategic expansion efforts.
• Operating in an environment free from religious limitations.

 

IPO Weakness

• The core focus of the company revolves around the sale of buffalo meat, and any decrease in demand or objections from activists could have a negative effect.  
• It operates in a sensitive industry where there is a risk of facing backlash from activists or certain religious groups.    
• Challenges may arise in maintaining quality standards due to the high demand or potential difficulty in meeting customer expectations.   
• Ensuring the acquisition, retention, and renewal of specific approvals and licenses.   
• The demand for the products may experience a decline due to unforeseen circumstances such as a pandemic or other unprecedented events.

 

 

IPO GMP

On June 16, 2023, the GMP of HMA Agro Industries' IPO stood at approximately Rs. 22(+/-), with a price band set at Rs. 585. This suggests that the estimated listing price of the IPO could be around Rs. 607, indicating an expected gain of approximately 3.76%.

 

Conclusion

India ranks as the second-largest exporter of buffalo meat worldwide, and it is poised to potentially become the market leader, capturing a 50% share of global exports.

As the largest exporter of buffalo meat in India, HMA Agro Industry stands to directly benefit from this trend, leading to positive implications for the company's shares. However, it is crucial to exercise caution and thoroughly assess all aspects before making any investment decisions, as investing always carries inherent risks. It is advisable to conduct comprehensive research and seek guidance from financial experts such as Mukul Agarwal. 

 

Hope you enjoyed this IPO analysis. Tap to Apply

 

To Read the Prospectus of the Company Click Here to Download the DRHP/ RHP

 

 

Thank You for reading this blog.
Hope you loved the IPO analysis.
Please Comment Below with your feedback because Your feedback motivates us to deliver more such content.

 

Follow MUKUL AGRAWAL for the latest IPO news and reviews. You can connect with us on social media platforms like Twitter, Facebook, and Instagram. You can also subscribe to our YouTube Channel for the latest videos of the stock market.