HMA Agro Industries IPO opens today: Check price band and analysts views

The Rs 480-crore initial public offering (IPO) of HMA Agro Industries opens for subscription on Tuesday, June 20 as the company intends to sell its shares in the fixed price band of Rs 555-585 apiece. The primary stake sale of HMA Agro is open for subscription till Friday, June 23.

The IPO consists of fresh issues of up to 150 crore, while an offer-for-sale (OFS) of up to 330 crore by promoters and existing shareholders of the company. Investors can make a bid of a minimum of 25 equity shares and its multiples thereof.

A day ahead of its IPO, HMA Agro Industries on Monday allotted 24,61,537 shares to seven anchor investors at Rs 585 apiece, amounting Rs 143.99 crore, including Craft Emerging Market Fund - Citadel Capital Fund, Minerva Ventures Fund, Forbes EMF, Craft Emerging Market Fund -Elite Capital Fund, Coerus Capial Opportunities, Radiant Global Fund and Absolute returns Scheme.

HMA Agro Industries is one of the largest exporters of buffalo meat in India, accounting for more than 10 per cent of India’s export of frozen buffalo meat. Its products are self-branded, packaged under the brand name 'Black Gold', 'Kamil' and 'HMA' and exported to over 40 countries.

HMA Agro has four fully integrated packaged meat processing plants located at Aligarh, Mohali, Agra, and Parbhani and is in the process of setting up a fifth fully integrated owned meat product processing unit in Haryana. India, after Brazil, is the second-largest exporter of buffalo meat in the world.

Agra-based HMA Agro Industries also owns two additional secondary level meat processing units at Jaipur and Manesar. The proceeds from the issue of fresh shares will be utilized towards working capital requirements of the company, and general corporate purposes. There are no listed peers of the company.

Analysts remain divided on the stock. A few suggest investing in the issue citing its strong growth, rising demand of meat in the world and consistent performance. However, a few suggest to avoid the issue citing mounting debt and corporate governance concerns in the company.

The annual earnings of HMA Agro Industries have shown robust growth year over year. Its exports have also risen amidst the control of many regulatory bodies including APEDA, said Ravi Singh, Vice President and Head of Research, ShareIndia Securities "The IPO seems to be reasonably priced, hence cash surplus investors may subscribe to this IPO from medium-term," he said.

If we look at the company over the previous four years, we can see that it has been consistently growing, with the exception of the COVID period. PAT is also growing consistently, said Ravi Singhal, CEO, GCL Broking.

"On the other hand, debt continues to climb. There are several legal proceedings pending against the promoters, and the books also include contingent liabilities that may escalate.  As a result, iPO should be avoided in terms of corporate governance," he said.

The company has reserved 50 per cent of the shares for qualified institutional buyers (QIBs), while a 15 per cent quota is reserved for non-institutional investors (NIIs). Retail investors will get the remaining 35 per cent of the allocation.

Aryaman Financial Services is the sole book running lead manager to the issue, while Bigshare Services has been appointed as the registrar to the issue. The stock will be listed at both BSE and NSE and the stock is likely to make its debut on July 4, 2023.