Mukka Proteins IPO: 10 things to know before you buy into Rs 224-cr issue

Established in March 2003, Mukka Proteins Limited specializes in the manufacturing of fish protein products

Mukka Proteins Limited has geared up to go public on February 29 to raise Rs 224 crore. The IPO will be an entirely fresh issue of 8 crore shares.

With six manufacturing facilities, Mukka Proteins supplies fish meal, fish oil and fish soluble paste which is an essential ingredient in the manufacturing of aqua feed (for fish and shrimp), poultry feed (for broiler and layer) and pet food (dog and cat food).

Let's take a look at some of the key points before you decide to buy into the Rs 224-crore public issue...

1. IPO Dates
The IPO will open for subscription on February 29, and close on March 4, 2024.

2. Price Band
The price band for the issue has been fixed at Rs 26-28 per share.

3. Offer Details
The company aims to raise Rs 224 crore through the issue and will use the proceeds for its working capital requirements and spend for the working capital requirements of its associate company Ento Proteins.

4. Objectives of the issue
The company based in Karnataka plans to allocate Rs 120 crore for meeting its working capital requirements. It intends to allocate Rs 10 crore for the working capital needs of its associate company, Ento Proteins. The rest of the net proceeds from the fresh issue will be earmarked for general corporate purposes.

5. Lot Size
Investors can bid for a minimum of 535 equity shares and in multiples thereof. Hence, the minimum investment by retail investors would be Rs 13,910 [535 (Lot size) x 26 (lower price band)]. At the upper end of the price band, the bidding amount will increase to Rs 14,980.

6. Company Profile
Established in March 2003, Mukka Proteins Limited specialises in the manufacturing of fish protein products. Mukka Proteins Limited extends its global reach by exporting its products to more than 10 countries. Some of the countries in its export market include Bahrain, Bangladesh, Chile, Indonesia, Malaysia, Myanmar, Philippines, China, Saudi Arabia, South Korea, Oman, Taiwan, and Vietnam.

7. Financials of the Company
For the fiscal year ended March 2022 (FY22), the company achieved a consolidated net profit of Rs 25.8 crore, marking a substantial increase from Rs 11.01 crore in the previous year. During the same period, the revenue from operations experienced growth, rising from Rs 603.8 crore to Rs 770.5 crore. In the first nine months of the fiscal year ending December 2023 (FY23), the company reported a net profit of Rs 25.6 crore on revenue of Rs 756.4 crore.

8. Lead Managers
Fedex Securities Pvt Ltd is the book-running lead manager of the Mukka Proteins IPO, while Cameo Corporate Services Limited is the registrar for the issue.

9. Key Risks
(i) The company recently ventured into the insect protein business and may be unable to execute a strategy to expand the business or find a suitable market for insect proteins, which could have a material adverse effect on the business, financial condition and results of operations.
(ii) It generates a majority of its revenue through the sale of fishmeal in India, China, Vietnam and Japan. Any adverse developments or changes in the demand for products, consumption patterns, or government regulations harm the business, financial and profitability of the company.
(iii) A majority of its supplies are obtained from a limited number of suppliers. Mukka does not have any formal long-term arrangements with the suppliers of key raw materials. Any significant variation in the supply can affect company financials.

10. Listing DateThe Mukka Proteins IPO is scheduled to list on the BSE and NSE on March 7, 2024.