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.

 

 

Want to start Your Journey in stock market trading and investment? Join our Stock Market Class to become beginner to expert trader! We cover everything from the basics of trading to advanced strategies for picking stocks. Plus, we're offering a special discount for women and students. Don't miss out - enroll now and kickstart your path to success in the stock market!

Open a world of Stock Market by Opening a Demat Account with your favourite Broking firm & Get a trading Strategy worth Rs.15,000!

• AngelOne
• Zerodha
• Upstox
• Alice Blue

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.