Mukka Proteins Ltd. IPO
Published by Sharekhan Education | March 1, 2024
Mukka Proteins Ltd IPO is coming up with an issue size of ₹ 224 Cr and Price Band in the range of ₹ 26-28. The issue opens on Thursday, 29th Feb’2024 and closes on Monday, 4th March’2024.
Company Overview:
Mukka Proteins Ltd. is a prominent manufacturer of fish protein products in India. The company’s product line includes fish meal, fish oil, and fish soluble paste, crucial ingredients for aqua feed, poultry feed, and pet food production. The company has a market share of approximately 25-30% in India. They export to various countries, including Bangladesh, Chile, Indonesia, Malaysia, the Philippines, China, Saudi Arabia, South Korea, Oman, Taiwan, and Vietnam. Currently, they operate six production facilities, four in India and two in Oman. The company is certified by NQA and UKAS for ISO 22000:2018 and ISO 9001:2015 management system standards.
Objects of Mukka Protein IPO:
The IPO consists of a fresh issue of equity shares totaling ₹224 crores. The funds raised will be utilized for working capital requirements, investment in the associate company Ento Proteins, and general corporate purposes. For investors looking to apply for the IPO, the minimum application is set at 535 shares & its multiples. Post allotment, the shares will be listed on BSE and NSE, enhancing the brand name.
Competitive Strengths:
Mukka Proteins Ltd. maintains high-quality standards and adheres to stringent product specifications. For the past seven years, MPEDA has consistently acknowledged it for its export performance.
The company strategically locates all its facilities near the coastline, facilitating easy access to fresh and cost-effective raw materials, and thereby optimizing transport costs.
Business Strategy:
Operating in a sizeable market, the company aims to capture a larger market share by strengthening its position in existing markets and expanding to new geographies. Mukka Proteins Ltd. is diversifying its products into a new protein source, insect-based nutrition. The company holds 50% of the total paid-up equity share capital of EPPL, a company specializing in insect proteins.
Key Concerns:
The company’s operations are sensitive to weather conditions, like cyclonic storms, unpredictable rainfall, and potential El Niño effects. These weather conditions affect raw material procurement and processing.
In the event of an outbreak, the business faces a threat from livestock diseases. Instances of non-compliance with regulatory filings may subject the company to regulatory actions and penalties.
Financials:
Mukka Proteins Ltd. has demonstrated a robust financial performance with a revenue growth of 39.6% CAGR over FY21-23. During the same period, the Operating Profit has experienced a Compound Annual Growth Rate (CAGR) of 98.4%, resulting in an expansion of operating margins from 3.6% to 7.3%. PAT has grown at an impressive 121.5% CAGR. At the upper end of the price band (₹26-28), the issue appears reasonably valued at a P/E of 19x on post-issue FY23 earnings.
Source: Mukka Proteins Ltd IPO Red Herring Prospectus
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