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HOAC Foods India Ltd IPO: Review, Valuation, GMP & Date

  


HOAC Foods India Limited IPO  - Complete Overview

Established in 2018, HOAC Foods India Limited specializes in the manufacturing of flour (chakki atta), herbs & spices, unpolished pulses, grains, and yellow mustard oil, which it sells in and around Delhi-NCR under the brand name “HARIOM”.

The company's franchisee network consists of 4 company-owned outlets and 6 franchisee-owned outlets, totaling 10 Exclusive Brand Outlets.

As of December 31, 2023, the company's sales and marketing team comprises 12 employees. Additionally, the company relies on a direct-to-consumer (D2C) platform through its in-house-built mobile application available on both Google Play Store and Apple’s App Store, as well as its company website.

HOAC Foods India Limited offers a diverse range of flour, including MP Sharbati Atta, MP Lok One Atta, Multi-grain Atta, and various other healthy flours.

The company's product portfolio encompasses 4 categories: Spices & Herbs, Oil, Wheat Flour (Chakki Atta) & Healthy Flour, Pulses, Rice & Grain, along with other food products, totaling 153 product SKUs.

The manufacturing facility of HOAC Foods India Limited is situated in Gurugram.

As of December 31, 2023, the company generated revenue of Rs. 1,148.59 lakhs.

HOAC Foods India Limited IPO Overview

HOAC Foods India Limited IPO date is slated to be open for subscription from May 16, 2024, to May 21, 2024. This NSE SME IPO follows a Fixed Price Issue IPO.

HOAC Foods India Limited IPO price is fixed at Rs.48 per share. 

The total issue size of this IPO amounts to Rs.5.54 Cr. The company has allocated 50% shares to retail investors and 50% shares to other investors.

Company Financial

Compared to the financial year ending March 31, 2023, and March 31, 2022, HOAC Foods India Limited has seen growth in total assets, net worth, and total revenue. The profit after tax and the total borrowing has also increased.

Amount in Lakhs

Period

31 Dec 2023

31 Mar 2023

31 Mar 2022

Total Assets 

766.40

491.72

359.71

Total Revenue

1,154.71

1,219.05

1,094.03

PAT

74.50

58.79

27.33

Net worth

315.73

156.86

98.07

Reserve & Surplus 

46.91

135.16

76.37

Total Borrowings

204.05

190.38

147.50

Online and offline channel revenue break up

(Amount in lakhs)

Distribution Channels

December 31, 2023 

March 31, 2023

March 31, 2022

Online Channels (Mobile Applications, Website, In calls)

239.84 

297.15 

271.94

Offline Channel (Exclusive Brand Outlets)

908.74 

912.94 

808.43

Total 

1,148.59 

1,208.56 

1,087.27

 

The Objective of the Issue

The company intends to allocate the funds raised through this Issue for the following purposes:

a) Meeting the company's working capital needs.

b) Addressing general corporate requirements.

Peers of HOAC Foods India Limited IPO

Name of the Company

Face Value (Rs)

EPS (Rs)

P/E Ratio

HOAC Foods India Limited

10

2.84

16.90

Contil India Limited

10

2.01

77.11

Jetmall Spices and Masala Limited

10

0.49

32.65

 

Evaluation

The IPO is priced at Rs. 48 per share.

Evaluation of P/E Ratio

  • Considering the FY23 EPS of Rs 3.19 from the last year, the resulting P/E ratio is 12.30x.

  • Taking into account the weighted EPS of Rs 2.62 for the last three years, the P/E ratio amounts to 18.32x.

Comparative Analysis with Listed Peers

  • The industry's average P/E is 54.88x.

As a result, the IPO price range, with a P/E ratio ranging from 12.30x to 18.32x, seems fully priced to the industry average of 54.88x.

 

 

IPO's Strengths 

  • Implementing a sustainable business model.

  • Offering a diverse product range to tap into the expanding Indian flour, spice, and food market.

  • Adopting an omnichannel approach to reach customers through various platforms.

  • Utilizing cluster-based distribution methods via a network of retail outlets.

  • Leveraging in-house manufacturing capabilities for production.

  • Maintaining a steadfast commitment to quality and ensuring maximum nutritional value in products.

  • Boasting a robust and reliable management team with a proven track record.

  • Cultivating long-term relationships with customers to foster loyalty.

  • Establishing a strong supply chain management system to streamline operations.

IPO Weaknesses 

  • The company is obligated to secure, renew, or uphold statutory and regulatory permits, licenses, and approvals essential for its business operations.

  • While some of its products, such as Pulses, Rice, Raw or Sabut Spices, Grains, Millets, Sugar, and jaggery, are not manufactured internally, the company procures them from third-party suppliers.

  • Operating within highly competitive markets, the company faces rivals with larger scales and resources, potentially enabling them to compete more effectively.

  • Mishandling, processing, or storing raw materials or products, as well as spoilage or damage to such items, or the perception of contamination in products, could lead to regulatory repercussions for the company.

  • The company's operational focus primarily lies within the Delhi-NCR region. Failure to expand operations could impede growth and adversely impact business prospects.

  • Past trends indicate that the company has experienced negative cash flow in the past and may encounter similar challenges in the future.

IPO GMP Today 

The Latest GMP of HOAC Foods India Limited is Rs.145.

HOAC Foods India Limited IPO timetable (Tentative)

HOAC Foods India Limited IPO is scheduled from May 16 to May 21, 2024, with allotment on May 22, refund initiation on May 23, and listing on May 24, 2024.

Events 

Date

IPO Opening Date

May 16, 2024

IPO Closing Date

May 21, 2024

IPO Allotment Date 

May 22, 2024

Refund initiation 

May 23, 2024

IPO Listing Date

May 24, 2024

HOAC Foods India Limited IPO Details 

HOAC Foods India Limited IPO, with a face value of Rs.10 per share, opens on May 16 and closes on May 21, 2024, offering 1,155,000 shares at Rs.48 per share, with a lot size of 3000 shares, aiming to raise Rs.5.54 Cr, and will be listed on NSE SME.

IPO opening & closing date 

May 16, 2024 to May 21, 2024

Face value 

Rs.10 per share

Issue Price

Rs.48 per share

Lot Size

3000 Shares

Price of 1 lot

Rs. 144,000

Issue Size

1,155,000 shares (aggregating up to ₹5.54 Cr)

Fresh issue 

1,155,000 shares (aggregating up to ₹5.54 Cr)

Listing at

NSE SME

Issue Type 

Fixed Price Issue IPO

Registrar 

Kfin Technologies Limited  


HOAC Foods India Limited IPO Lot Details 

For HOAC Foods India Limited IPO, the retail investor minimum and maximum lot investments are both 1 lot (3000 shares) at Rs.141,000 while for HNI investors, the minimum investment is 2 lots (6000 shares) at Rs.282,000.

Minimum Lot Investment (Retail) 

1 lot

Maximum Lot Investment (Retail) 

1 lot

Minimum Lot Investment (HNI) 

2 lot


HOAC Foods India Limited IPO Reservation

Other Investors Share Portion

50%

Retail Investors share Portion

50%

Promoters and Management of HOAC Foods India Limited

  • Mr. Rambabu Thakur

  • Mrs. Gaytri Thakur

  • Yashwant Thakur.

Pre-issue Promoter shareholding

99.99%

Post-issue Promoter shareholding

69.95%

 

HOAC Foods India Limited IPO Lead Managers

  • GYR Capital Advisors Private Limited 

Dividend Policy

The Company has not declared any dividends during the last three Financial Years.

 

 

Conclusion

The company operates in a competitive market. It has experienced negative cash flow in the past and posted average financial performance over the period. Investors may apply in the upcoming IPO for short to medium-term gains to optimize profit.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

 

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Frequently Asked Questions

+

The IPO is scheduled to open for subscription on May 16, 2024.

 

+

The issue price for HOAC Foods India Limited IPO is set at Rs. 48 per share.

 

+

The total issue size of the IPO is Rs.5.54 Cr, with 50% reserved for retail investors.

 

+

The IPO is set to close on May 21, 2024.

 

+

The IPO's net proceeds will be allocated towards funding the working capital requirements of the company and general corporate purposes.

 



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