Unlisted shares of Mukka Proteins Ltd are trading Rs 15 higher in the grey market, expecting a 53.57 per cent listing gain from the public issue
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Mukka Proteins IPO: The initial public offering of Mukka Proteins Ltd, which manufactures fish meal, fish oil and fish soluble paste, has been opened on Thursday, February 29. The price band of the Rs 224-crore IPO has been fixed at Rs 26-28 apiece. The company’s maiden public issue will conclude on March 4.
Till 11:00 am on the first day of bidding, the IPO has received 0.32 per cent subscription garnering bids for 1,78,36,365 shares as against 5,60,00,435 shares on offer, as per the latest NSE data. The retail quota has received 0.54 times subscription, while the non-institutional investor (NII) category has been subscribed 0.22 times.
The allotment of the Mukka Proteins IPO will take place on March 5, while its listing will take place on both NSE and BSE on March 7, 2024.
Mukka Proteins IPO: Should You Subscribe?
Assigning the ‘Subscribe-Long Term’ rating, brokerage Anand Rathi in its IPO note said that at the upper price band, the company is valued at P/E (price-earnings) of 17.7 times with a market capitalization of ₹840 crore post issue of equity shares. The brokerage believes that valuations of the company is fairly priced and recommend a ‘Subscribe-Long Term’ rating to the IPO.
Advising investors to invest in this IPO with a medium to long-term perspective, Master Capital Services AVP (Research & Advisory) Vishnu Kant Upadhyay, said, “Mukka Proteins has a rich legacy of around five decades in the Indian marine industry and is one of the pioneers in the Fishmeal Industry having set up one of India’s first steam sterilised fishmeal plants. In fiscal 2023, the industry is estimated to see a huge jump in value as well as volume. The company posted on-year growth of 130-150 per cent in value terms and 90-110 per cent in volume terms and aims to increase market share by meeting customer demand for fish meal and fish oil.”
Mukka Proteins IPO GMP Today
According to market observers, unlisted shares of Mukka Proteins Ltd are trading Rs 15 higher in the grey market as compared with its issue price. The Rs 15 grey market premium or GMP means the grey market is expecting a 53.57 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
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‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Mukka Proteins IPO Details
The issue is entirely a fresh issue of up to 8 crore equity shares aggregating to Rs 224 crore at the upper end of the price band, with no Offer For Sale (OFS) component, Manguluru-based company said.
Of the total proceeds, Rs 120 crore will be used towards working capital requirements and up to Rs 10 crore for investment in its associate, Ento Proteins, for funding its working capital requirements. Besides, a portion will be used for general corporate purposes.
Investors can bid for a minimum of 535 equity shares and in multiples of 535 equity shares thereafter. Mukka Proteins is one of the key players in India’s fish protein sector.
Furthermore, fish oil has diverse applications, including pharmaceuticals (particularly in EPA-DHA extraction for nutraceuticals), soap making, leather treatment, and paint manufacturing. In the fiscal year 2023, the company contributed between 25 per cent and 30 per cent of the Indian fish meal and fish oil industry’s revenue, estimated to be between Rs 3,200 crore and Rs 4,100 crore, as per a Crisil report cited in the RHP (Red Herring Prospectus).
Mukka Proteins distributes its products both domestically and internationally, serving over 10 countries such as Bahrain, Bangladesh, Chile, Indonesia, Malaysia, Myanmar, Philippines, China, Saudi Arabia, South Korea, Oman, Taiwan, and Vietnam. At present, the company has six manufacturing facilities, with two held through its foreign subsidiary, Ocean Aquatic Proteins LLC, based in Oman, and four situated in India.
Additionally, it operates five storage facilities and three blending facilities strategically located along the Indian coastline. Also, the company plans to expand its manufacturing footprint through its associates, Ento Proteins Private Limited.
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On a consolidated basis, Mukka Proteins’ revenue from operations surged 53 per cent to Rs 1,177.12 crore in fiscal 2023 from Rs 770.50 crore in fiscal 2022, and profit after tax jumped 84 per cent to Rs 47.52 crore in fiscal 2023, from Rs 25.82 crore in fiscal 2022. Fedex Securities Private Limited is the sole book-running lead manager to the offer. The equity shares are proposed to be listed on the BSE and NSE.
