Uma Exports IPO: Agricultural produce and commodities exporter Uma Exports IPO received good response from investors on the first day of the bidding itself. The issue was subscribed 1.68 times garnering bids for 1.55 crore equity shares against offer size of 92.30 lakh equity shares. Incorporated in 1988, Uma Exports is engaged in trading and marketing of agricultural produce and commodities in India from Canada, Australia and Myanmar. It has expanded its business in Malaysia, UAE, Sri Lanka, and Bangladesh. It deals in sugar, spices like dry red chillies, turmeric, coriander, cumin seeds, food grains like rice, wheat, corn, sorghum and tea, pulses and agricultural feed like soybean meal and rice bran de-oiled cake.
Uma Exports IPO: Subscription Status
Retail investors bid 2.3 times the portion set aside for them, while the quota of non-institutional investors was subscribed 32 percent. Qualified institutional buyers have not started bidding yet. Half of the offer is for QIBs, 35 percent for retail investors and the remaining 15 percent for non-institutional investors.
The company has reserved 50 per cent of equity shares for qualified institutional buyers (QIBs), whereas 15 per cent shares are allocated to HNI investors. Retail bidders will get the remaining 35 per cent portion of the issue.
Uma Exports IPO: Price Band
Uma Exports is planning to raise Rs 60 crore through its maiden public offer which is a fresh issue of shares. The price band for the offer, which closes on May 30, has been fixed at Rs 65-68 per share. Investors can bid for a minimum of 220 shares and in multiples thereafter.
Shares of the company will be listed at both BSE and NSE, whereas investors can bid for the issue till Wednesday, March 30. Investors can bid for minimum of 220 equity shares.
Uma Exports IPO: Should You Invest?
Uma Exports is bringing the issue at a P/E multiple of 14x on pre issue FY21 EPS basis, said Hem Securities in its IPO report. The company, which is into trading and marketing of agricultural produce and commodities, has debt on books, it added.
“Although the company’s other ratios like margin & return on shareholder’s fund are better than its peers but looking after business profile and debt condition, we recommend ‘Avoid’ on the issue,” it added. The net proceeds from the issue will be utilised towards funding its working capital requirements worth Rs 50 crore and other corporate purposes.
The issue will be utilised towards funding its working capital requirements worth Rs 50 crore and other corporate purposes.
Manoj Dalmia-Founder and Director-Proficient Equities Limited said: “The revenues are slightly inconsistent and also the profit margins are less than 10 per cent for each quarter. It is a commodity-based business and may face risks from seasonality as well as government import-export policies. One can wait for the listing and wait for results and then make a decision accordingly. We recommend avoiding this issue.”
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