Regaal Resources shares are expected to debut with a premium of more than 25 percent on Wednesday, going by grey market indications, after strong demand in its initial share sale.
The Rs 306-crore initial public offering (IPO) of the maize-based speciality products manufacturer received bids 159.88 times the issue size. Earlier, the company raised about Rs 92 crore from anchor investors. The price band was fixed at Rs 96-102 per share.
Narendra Solanki, Head – Fundamental Research, Investment Services, Anand Rathi Shares and Stock Brokers, said Regaal Resources is among the largest maize-based speciality product makers in India with an installed crushing capacity of 750 tonnes per day. Its zero liquid discharge facility in Kishanganj, Bihar, spans 54 acres.
"On valuation, based on annualised FY25 earnings, the company is seeking a P/E of 21.9 times and a post-issue market capitalisation of around Rs 1,048 crore, making the issue appear fully priced. Operations are capital intensive and subject to agri cycles with limited pricing power. However, its location, customer base and expansion support long-term scalability. Investors may hold the issue for the long term post listing,” Solanki said.
Bhavik Joshi, Business Head, INVasset PMS, said the company’s proximity to the maize belt and export corridors to Nepal and Bangladesh gives it strategic advantage. The doubling of capacity to 750 tonnes per day in two years reflects its scalability, he added.
According to him, revenues have grown from Rs 489 crore in FY23 to Rs 918 crore in FY25, while profit margins improved from 3.43 per cent to 5.19 per cent. “At the upper band, the IPO is valued at 21.98 times FY25 earnings, which appears fair but leaves limited room for upside. The dividend pause after FY23 also shows capital retention is being prioritised,” Joshi noted.
Experts said the IPO offers exposure to India’s agro-processing sector at a time when demand for food-grade and industrial starches is rising. However, the valuation leaves little headroom for short-term gains, making it more suitable for investors with a long-term approach.
Of the fresh issue proceeds, Rs 159 crore will go towards repayment or pre-payment of certain borrowings.
Regaal Resources operates a zero liquid discharge maize milling facility catering to customers in food products, paper, animal feed and adhesives across India, and in export markets such as Nepal and Bangladesh.
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