An Export IPO: The IPO of agricultural products and commodity exporter Uma Exports received a good response from investors on the very first day itself. The issue was subscribed 1.68 times for 1.55 crore equity shares against an offer size of 92.30 lakh equity shares. Established in 1988, Uma Exports is engaged in trading and marketing of agricultural products and commodities from Canada, Australia and Myanmar to India. It has expanded its business to Malaysia, UAE, Sri Lanka and Bangladesh. It deals in sugar, spices such as dried red chillies, turmeric, coriander, cumin, rice, wheat, maize, cereals such as sorghum and tea, pulses and agricultural feeds such as soybean meal and oil-free cakes from rice bran.
Uma Exports IPO: Subscription Status
Retail investors bid 2.3 times the share earmarked for them, while the quota of non-institutional investors got subscribed 32 per cent. Qualified institutional buyers are yet to start bidding. Half the offer is for QIBs, 35 per cent for retail investors and the remaining 15 per cent for non-institutional investors.
The company has reserved 50 per cent equity shares for Qualified Institutional Buyers (QIBs), while 15 per cent shares have been allotted to HNI investors. The retail bidders will get the remaining 35 per cent of the issue.
Uma Exports IPO: Price Band
Uma Exports is planning to raise Rs 60 crore through its maiden public offering, which is the latest issue of shares. The price band for the offer closing on May 30 has been fixed at Rs 65-68 per share. Investors can bid for a minimum of 220 shares and in multiples thereafter.
The company’s shares will be listed on both BSE and NSE, while investors can bid for the issue till Wednesday, March 30. Investors can bid for a minimum of 220 equity shares.
Uma Exports IPO: Should You Invest?
Hem Securities in its IPO report said that Uma Exports is positioning the issue on a pre-issue FY21 EPS basis at a P/E multiple of 14x. The company, which is into trading and marketing of agricultural produce and commodities, has debt on books.
“While the company’s other ratios such as margin and return on shareholder’s funds are better than its peers, given the business profile and debt position, we recommend ‘avoiding’ this issue.” The net proceeds from the issue will be used to finance its working capital requirements of Rs 50 crore and other corporate purposes.
The issue will be used to meet the company’s working capital requirements of Rs 50 crore and for other corporate purposes.
Manoj Dalmia-Founder and Director-Proficient Equities Ltd said: “Revenue is slightly inconsistent as well as profit margin is less than 10 per cent for each quarter. It is a commodity-based business and may face risks from seasonal as well as government import-export policies. One can wait for the listing and wait for the results and then take a decision accordingly. We recommend avoiding this issue.”
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