Mukka Proteins shares likely to debut with triple-digit premium

Mukka Proteins set to debut on bourses on March 7

Shares of fish protein products manufacturer Mukka Proteins seem to be getting big interest from investors, as experts expect it to debut with around 125 percent premium over the issue price on March 7.

According to them, robust subscription to the company's public issue, strong customer base with good positioning in the industry, and healthy financial performance in the past years with strong market share in India are some of reasons behind the triple-digit listing gains.

The Rs 224-crore initial public offering of the Mangaluru-based company was subscribed 136.99 times during February 29-March 4, as non-institutional investors bought 250.38 times the allotted quota, qualified institutional buyers picked 189.28 times and retail investors bid 58.52 times the portion set aside for them.

"We expect the stock to list at a premium of around 125 percent to the issue price of Rs 28 per share," Dhruv Mudaraddi, research analyst at Stoxbox said.

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Mukka Proteins established a strong customer base and enduring relationships with significant aqua feed, poultry feed, and pet food producers. The company facilities, being strategically located, provide access to key raw materials, pelagic fishes such as sardine, mackerel, anchovy, etc., thus minimizing dependency on one particular coastal landing site and fish catchments, Mudaraddi said.

Mukka Proteins, which sells products domestically and exports to more than 10 countries (including Bahrain, Bangladesh, Chile, Indonesia, Malaysia, Myanmar, Philippines, China, Saudi Arabia, South Korea, Oman, Taiwan and Vietnam) also has a record of healthy financial performance. Its net profit grew 84 percent on-year to Rs 47.5 crore and revenue from operations increasing 53 percent to Rs 1,177.1 crore for the year ended March FY23.

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Net profit in the six-month period ended September FY24 stood at Rs 32.98 crore on revenue of Rs 606 crore.

Amit Goel, co-founder and chief global strategist at Pace 360, also expects Mukka Proteins to list around Rs 63-67 with listing gain of around 125 percent as Mukka is one of the leading companies for manufacturing and marketing of fish meal, fish oil and allied products in domestic as well as global markets.

"It has around 25-30 percent market share in India. The business reported growth in both its top and bottom lines, which bodes well for the future," Goel said.

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The company has six manufacturing facilities with four in India and two in Oman. Further, it operates three blending facilities and five storage facilities in India, which all these facilities are strategically located within the close proximity to the coastline.

Meanwhile, Mukka Proteins' IPO shares also attracted big interest in the grey market, trading at around same 125 percent premium over the issue price, the market observers said. The grey market is an unofficial platform wherein IPO shares can be bought and sold till the listing.

The company raised Rs 224 crore through the IPO, which comprises only a fresh issue component. The fresh issue money will be utilised mainly for working capital requirements of the company, and associate Ento Proteins, besides general corporate purposes.

The price band for the public issue was Rs 26-28 per share.

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