The public offer of Uma Exports, the agricultural produce and commodities trader, has consistently been garnering strong response from investors as it mopped up bids for 7.08 crore equity shares against IPO size of 92.30 lakh equity shares, getting oversubscribed by 7.67 times on March 30, the final day of bidding.
Retail investors have put in bids 10.11 times the portion set aside for them, the allotted quota of non-institutional investors was booked 2.22 times and that of qualified institutional buyers 2.81 times.
The offer will fetch the agri-commodities trader Rs 60 crore which will be used as working capital. The price band for the offer is Rs 65-68 per equity share.
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"The company is bringing the issue at price band of Rs 65-68 per share at price-to-earnings multiple of 14x on pre-issue FY21 EPS basis," says Astha Jain, Senior Research Analyst at Hem Securities.
"The company being into trading and marketing of agricultural produce and commodities has debt on book. Although company's other ratios like margin & return on shareholder's fund are better than its peer but looking after business profile & debt condition," says Astha who recommended an avoid rating on the issue.
Its total revenue from operations has grown at a CAGR of 51.10 percent during FY19 to FY21. Its EBITDA (earnings before interest, tax, depreciation and amortisation) in the same period has grown at a CAGR of 52.76 percent and profit grew at a CAGR of 105.45 percent.
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As on September 2021 and March 2021, company's outstanding total fund based indebtedness was Rs 56.28 crore and Rs 38.62 crore, respectively. In addition to the indebtedness for company's existing operations, it may incur further indebtedness during the course of company's business, says Astha Jain.
Uma Exports is engaged into trading and marketing of agricultural produce and commodities such as sugar, spices like dry red chillies, turmeric, coriander, cumin seeds, food grains like rice, wheat, corn, sorghum and tea, pulses and agricultural feed like soyabean meal and rice bran de-oiled cake. Company imports lentils, faba beans, black urad dal and tur dal in India in bulk quantities.
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