HMA Agro Industries IPO subscribed 98% on Day 3
Synopsis
HMA Agro Industries' IPO saw strong response on Day 3, driven by qualified institutional buyers and non-institutional investors. Retail interest, however, was subdued, with just 54% subscription. The company is offering shares at Rs 555-585 apiece with a lot size of 25 shares.
According to market sources, the company's shares are commanding a GMP of Rs 24, down marginally from the previous day. The GMP indicates the listing trend for the company, albeit it is not the last word and is subject to change rapidly.
HMA Agro Industries is offering its shares at Rs 555-585 apiece, where investors can subscribe to 25 shares in one lot.
While some analysts recommended investors subscribe to the issue, a few others have an "avoid" tag, which probably affected the demand for the IPO in the first two days.
"On the upper end of the price band, the issue is valued at a P/E of 24.0x based on FY2022 earnings, which we feel is richly valued. It is also interesting to note that Rs 330 crore of the issue size is an OFS. In terms of listing gains, we recommend an “Avoid” rating for the issue," Stoxbox said.
Meanwhile, Avinash Gorakshakar of Profitmart Securities said investors should subscribe for the long-term, given the niche nature of the business and reasonable valuations. Currently, there are no listed companies in India that engage in a business similar to that of HMA Agro Industries.
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HMA Agro Industries is one of the top three market leaders in the export of packaged frozen buffalo meat products from India. It has recently begun a product diversification process into other food processing and exports of products such as frozen fish and basmati rice.
The company has long-standing relations with customers, which are spread in various geographies across the globe. However, it is to be noted that the company is heavily dependent on the export business for its business operations which contributed to around 90.2% of its revenue in FY22.
The IPO comprises a fresh issue of equity shares up to Rs 150 crore and an offer for sale (OFS) of Rs 330 crore by promoters and selling shareholders.
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