Mukka Protein opens IPO tomorrow; Here Are the 5 Reasons know before Apply

Mukka Proteins Limited manufactures fish protein products, producing and supplying fish meal, fish oil, and fish soluble paste, and is set to open tomorrow February 29.

IPO Details

The upcoming IPO of Mukka Proteins will be open for subscription from February 29 and will close on March 4, eventually listing on March 7, 2024. The price band for the IPO is set at Rs 26 to Rs 28, having a face value of Rs 1 per share. For an application, the minimum lot size is 535 shares which means the minimum investment amount required by retail investors is Rs 14,980.

The total issue size of the IPO is Rs 224 crore, comprising solely of a fresh issue of 8 crore shares, and it will be listed on both the BSE and NSE exchanges.

In Mukka Protein’s upcoming IPO, Qualified Institutional Buyers (QIBs) can subscribe to up to 50% of the net issue, while retail investors a minimum of 35%. Non-Institutional Investors (NIIs), including High Net Worth Individuals (HNIs), are allocated not less than 15% of the net issue.

Fedex Securities Pvt Ltd serves as the book-running lead manager for the Mukka Proteins IPO, with Cameo Corporate Services Limited acting as the registrar for the issue.

Object of the Issue

The Company intends to utilise the Net Proceeds from the Issue for specific purposes. These include funding the working capital requirements of the Company and making investments in the Associate, namely Ento Proteins Private Limited to support its working capital needs, and for general corporate purposes.

Financial Performance:

Peers:

Observing the sales growth, Mukka Protein stands out by registering a 53% increase in sales in FY23. When comparing the PAT margin of the upcoming IPO Mukka Protein Limited with its peers, it falls between Avanti Feed and Godrej Agrovent at 4.02% in FY23.

Business Overview

Mukka Proteins Limited manufactures fish protein products, producing and supplying fish meal, fish oil, and fish soluble paste. These products serve as essential ingredients for the production of aqua feed (for fish and shrimp), poultry feed (for broilers and layers), and pet food (for dog and cat food).

The company exports its products to over 10 countries, including Bahrain, Bangladesh, Chile, Indonesia, Malaysia, Myanmar, Philippines, China, Saudi Arabia, South Korea, Oman, Taiwan, and Vietnam.

Currently, the company operates six production facilities, with four located in India and two in Oman, held by its foreign subsidiary, Ocean Aquatic Proteins LLC. Additionally, the company runs three blending plants and five storage facilities, all situated in India.

Investors may consider applying to the IPO for the following reasons:

1. Leading Market Position: The company is a top manufacturer and exporter in the fish protein products industry, holding a significant 18% market share in India’s fish meal exports.
2. Good Customer Base: With nearly 20% of revenue generated from customers with a minimum 5-year relationship, the company has a solid and loyal customer base. It consistently attracts new customers from both domestic and foreign markets.
3. Location Advantage: The company’s facilities are strategically located on coastlines, providing easy access to pelagic fish, a crucial raw material for fish oil production. This strategic positioning helps in cost savings on transportation and exporting.
4. High Entry Barriers: Rigorous audits by authorities and a moratorium by the Marine Products Export Development Authority create significant entry barriers for new competitors in the fish meal and oil manufacturing sector.
5. Experienced Promoters: The company is led by promoters with five decades of industry experience, actively engaged in manufacturing, procurement, and marketing. Their extensive involvement in various organizations and associations strengthens relationships with suppliers and customers, contributing to the company’s success.

Investors are advised to mark the date for IPO application.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.