IPO Synopsis
IPO Synopsis
Kolkata based Keventer Agro Ltd filed its DRHP with SEBI on 8th August, 2021. The issue consists of a fresh issue worth Rs.350 crore and an offer for sale of up to 10,767,664 equity shares by Mandala Swede SPV, the organization that holds a 6.61% stake in the company. The OFS includes 15.35 million compulsory convertible preference share. This will be converted to a maximum of 9.15 million shares.
It is expected that the company will raise Rs.50 crore through a pre-IPO placement which will in turn decrease the issue size. The book running lead managers to the issue are ICICI Securities Ltd, Axis Capital Ltd and JM Financial Ltd.
Objectives of the issue
1. Rs.155 crore is to be kept aside for the repayment and prepayment of debt availed by the company
2. Rs.110.76 crore is going to be used to fund the capital expenditure requirement of the company
About Keventer Agro Ltd
About the company
Keventer Agro is a Kolkata based FMCG company that is focused on packaged, dairy and fresh food products.
As of 31 March, 2021, the company had a sales force of 570 employees and 3,126 distributors. They also cater to 1,60,000-1,70,000 retail touch points. The products of the company are distributed in the states of Bihar, Jharkhand, Orissa, West Bengal, Assam, Mizoram, Nagaland and Sikkim. They have very recently started distributing their products in the states of Madhya Pradesh, Himachal Pradesh, Punjab, Rajasthan and UP. The company has a presence in the urban, semi-urban and rural areas and is seeking to cover more of the rural area. The company is one of the fastest growing companies in the North East and Eastern part of the country. The company grew at a CAGR of 18.46% over the last 10 years. The traditional sales of the company account for a whopping 92.5% of the sales and only 7.5% of the sales are threw the modern channels.
Keventer Agro Ltd Financial Status
Financials:
|
Particulars (In Rs cr) |
FY21 |
FY20 |
FY19 |
|
Total Income |
836.02 |
958.25 |
884.41 |
|
PAT |
(76.17) |
3.41 |
(0.115) |
|
EPS |
(29.05) |
(0.87) |
(0.04) |
|
Particulars (In Rs cr) |
FY21 |
FY20 |
FY19 |
|
Total Assets |
722.91 |
729.11 |
- |
|
Equity Share Capital |
131.13 |
131.13 |
131.13 |
|
Total Borrowings |
467.42 |
415.98 |
380.78 |
The key points are-
IPO Key Points
-
Strengths
1. The company is one of the leading players in North East and Eastern part of India and they serve a wide array of products to a broad market
2. Keventer Agro has a multi channel distribution platform and also uses technology to derive efficient distributions. Their points of sale include supermarkets like Big bazaar, Foodhall and Spencer’s Retail ltd
3. A significant amount of the resources have been utilized as marketing expenditure as marketing and proper visibility is the key to the success of the different brands supplied by the company
4. According to the company, R&D and innovation is the key to maintaining a good market share and having a good competitive edge
-
Risks
1. Any slowdown or disruptions in the manufacturing process or if the manufacturing capacity is under-utilized will adversely affect the business and operations
2. Any fall or compromise in the quality of the products being produced will affect the reputation of the company and in turn affect the sales
3. Failure to maintain customer’s brand recognition will lead to a loss in business
4. The securities of certain promoters were banned and suspended from trading on the Calcutta Stock Exchange due to non compliance
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