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HMA Agro shares debut with nearly 7% premium below grey market expectations

HMA Agro shares debut with nearly 7% premium below grey market expectations
Frozen meat exporter HMA Agro Industries made a positive market debut on Tuesday, listing with a premium of nearly 7% , against the issue price of Rs 585.

This is however much lower than what the grey market has been expecting, which was at least a ₹10-12, as per media reports. In fact, its premiums jumped to over ₹40 over the weekend, just days ahead of its debut.

The stock began the trade at Rs 615, a jump of 5.12 per cent, from the issue price on the BSE. Later, it climbed 14.60 per cent to Rs 670.45.

At the NSE, shares of the company started the trade at Rs 625, a gain of 6.83 per cent. The company commanded a market valuation of Rs 3,113.54 crore in early trade on the BSE.

In the broader market, the benchmark equity indices continued their record-shattering spree, with the Sensex and Nifty hitting their fresh all-time high levels in early trade.

HMA Agro is a government-recognised export house that sells buffalo meat in 40 different countries under brands like Black Gold, Kamil and HMA. The company has four meat-processing plants, and is setting up a fifth plant. It also sells rice and other agro products but that’s a minuscule part of its business.

About the IPO
The Initial Public Offer (IPO) of HMA Agro Industries was subscribed 1.62 times on the last day of subscription on June 23.

The Rs 480-crore IPO had a fresh issue aggregating up to Rs 150 crore and an offer-for-sale of up to Rs 330 crore.

The price range for the offer was Rs 555-585 a share.

The company proposes to utilise the net proceeds of the fresh issue for funding working capital requirements and other general corporate purposes.

Aryaman Financial Services was the manager of the offer.

The company’s net income has grown at a fair clip rate in the last three years — from ₹45.9 crore in FY20 to ₹71.6 crore in FY21, and ₹117.9 crore in FY22. As per a report by ICICI Direct, the total revenue has seen a jump of over 70% after being hit by the pandemic – ₹2,979 crore in FY22 from ₹1,720 crore in FY21.

The report further states that the nature of the business is highly regulated, environmentally sensitive and has a religious implication as well. Thus, there will be an outside risk of a failure to obtain, retain and renew approvals which in turn will adversely affect operations.

(With PTI inputs)


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