Gemini Edibles & Fats India Ltd IPO

Upcoming DRHP

IPO Synopsis

IPO Synopsis
Gemini Edibles & Fats India Ltd has filed a DRHP with SEBI to raise Rs2,500 crore through an initial public offering.
The IPO consists of a pure offer for sale of equity shares worth Rs25 crore by Pradeep Kumar Chowdhry, up to ₹225 crore by Alka Chowdhry, up to ₹750 crore by Golden Agri International Enterprises PTE Ltd, Rs1,250 crore by Black Riverfood 2 Pte and Rs250 crore by Investment and Commercial Enterprise Pte.
Golden Agri International Enterprises held 56.27% stake in the company while Alka Chowdhry had 11.56% stake. Black Riverfood, Investment and Commercial Enterprises and Pradeep Chowdhry had 25%, 6.6% and 0.57% stake in the firm, respectively.
Axis Capital, Credit Suisse Securities India, Kotak Mahindra Capital and Nomura Financial Advisory and Securities India are the book running managers to the issue.

Objective of the Issue
The proceeds from the Issue will be utilised for:
•    to carry out the Offer for Sale of Equity Shares aggregating up to Rs. 25,000.00 million by the selling shareholders 
•    achieve the benefits of listing the equity shares on the stock exchanges
 

About Gemini Edibles & Fats India Ltd

Headquartered out of Hyderabad, Gemini Edibles and Fats is one of the leading and the fastest growing edible oils and fats companies in India and is engaged in the business of manufacturing, distribution and branding of edible oils and specialty fats. The company is a market leader in the sunflower oil category with the ‘Freedom’ brand, in the states of Telangana, Andhra Pradesh, and Odisha, and hold the third largest market share in the state of Karnataka. The branded retail consumer products are marketed under its own brand, ‘Freedom’, for premium oils such as sunflower oil, rice bran oil, mustard oil and groundnut oil, and under ‘First Klass’ for palm oils.
It has three port-based manufacturing facilities on the eastern coast of India, with two in Kakinada and one in Krishnapatnam. It has a refining capacity of 2615 mt per day while packaging capacity stood at 3988 mt per day.
Its branded retail consumer products are sold in approximately 640 towns in Andhra Pradesh, Karnataka, Odisha and Telangana through a network of over 1,100 distributors and traders, serviced by 130 sales personnel and over 30 depots. Its ‘Freedom’ brand of sunflower oil was sold to more than 260,000 retail outlets across these states as of June.
It has three business verticals:
•    Branded retail consumer: Manufactures and markets oils such as sunflower oil, rice bran oil, mustard oil, groundnut oil, palm kernel oil and palmolein oil
•    Industrial consumer: Produces and markets oils and fats such as high stability frying oils, palm oils, cocoa butter substitutes, inter-esterified vegetable fats and shortenings to companies in the food industry
•    Bulk merchandising: Sells palmolein, palm kernel, sunflower and soyabean oils in bulk form to players operating with their own brands and to those who sell edible oil in unbranded or loose form
 

Peer Comparison

 

Name of the company

Total Revenue (in Rs. crores)

Basic EPS

NAV Rs. per share

PE

RoNW %

Gemini Edibles & Fats India Limited

7,863.11

55.48

157.92

NA

35.10%

Marico Limited

8,142.00

9.08

25.09

58.12

37.16%

Agro tech Foods Limited

893.42

13.21

178.93

75.79

7.33%

 

Financials

Particulars (in Rs. Crores)

FY21

FY20

FY19

Revenue

7,765.96

6,500.25

5,422.75

EBITDA

204.85

278.88

763.67

PAT

570.77

185.85

109.35

EPS (basic in Rs.)

55.48

18.07

11.78

ROE

35.10%

17.60%

12.60%

ROCE

28.90%

24.70%

53.70%

 

Particulars (in Rs. Crores)

FY21

FY20

FY19

Total Assets

3,293.40

2,523.25

1,909.40

Share Capital

10.29

10.29

10.29

Total Borrowings

798.19

772.39

696.52

 

Particulars (in Rs. Crores)

FY21

FY20

FY19

Net cash generated from / (used in) operating activities

588.40

221.26

-21.08

Net cash from / (used in) investing activities

-622.94

-253.93

436.40

Net cash flow from / (used in) financing activities

25.99

14.31

-399.06

Net increase (decrease) in cash and cash equivalents

-8.55

-18.36

16.26


The Key points are- 

Key Points

  • Strengths

    1.  Leading and reputable brands in both the retail consumer edible oil and the industrial consumer speciality fats and oils sector
    2.  Modern and strategically located manufacturing facilities
    3. Extensive and well-established sales and distribution network
    4. Strong financial position
       
  • Risks

    1. Availability and price of crude oil is subjected to significant variation thus causing possible disruption in continuous supply of raw materials
    2. Refineries are concentrated in Andhra Pradesh and a majority of our revenue from operations are derived from south India and Odisha, hence any calamities in the areas may affect the business
    3. Improper handling, spoilage, damage processing or storage of products or raw materials, or any real or perceived contamination in the products or raw materials, could subject the firm to regulatory action
    4. Manufacturing risks and regulatory non-compliances may disrupt our operations.
    5. Unable to consistently compete in intensively competitive industry of edible oils and specialty fat
    6. Any delay or inability in obtaining, renewing or maintaining permits, licenses, registrations and approvals
       

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