Subscription and key things to know

Trends

The IPO or initial public offering of was off to a good start today with shares fully subscribed on Day 1 itself, driven by strong retail demand. After being subdued for some time, primary market will see share sales of two companies this week: Veranda Learning and UMA Exports. Uma Exports plans to raise 60 crore from the issue. The price band has been fixed at 65-68 per share while the issue will close for subscription on 30th March 2022. As of 3 pm on Day 1, Uma Exports IPO was subscribed 1.73 times. 

UMA Exports IPO: Here are 10 things to know

The lot size in Uma Exports IPO is 220 shares. 35% of the total issue has been reserved for retail investors while 50% for QIBs (including anchor) and 15% for non-institutional investors. 

Corporate Capital Ventures is the lead manager of the issue while Mass Services is the registrar to the issue. Uma Exports proposes to utilize the net proceeds from the issue towards augmentation of working capital requirements and general corporate purposes.

The Kolkata-based company is engaged into trading and marketing of agricultural produce and commodities such as sugar, spices like dry red chillies, turmeric, coriander, cumin seeds, food grains like rice, wheat, corn, sorghum and tea, pulses and agricultural feed like soyabean meal and rice bran de-oiled cake. 

It also imports lentils, faba beans, black Matpe, and toor (Pigean Peas) in India in bulk quantities.

In 2021, the company’s revenue from operations stood at 750 crore while net profit stood at 12 crore, according to Hem Securities. 

According to brokerages, the allotment of shares in Uma Exports IPO is likely to be finalised on April 4 and listing likely on April 7.

As on September 30, 2021 and March 31, 2021, Uma Exports outstanding total fund based indebtedness was 56 crore and 38 crore respectively, according to Hem Securities, which has an avoid rating on the issue.

In the fiscal years 2021, 2020 and 2019, exports constituted 9.53%, 5.42% and 37.64%, respectively of its total income.

 “Uma Exports is engaged in the business of trading and marketing of agricultural produce and commodities like sugar, spices, lentils, etc. The company’s name suggest it to be an export company but majority of revenues come from domestic sales which is 90.34% of total sales in FY2021 while exports contribute only 9.66% to the revenue,” said said Abhay Doshi of Unlisted Arena.

“The company has EBITDA margins of 2.83% and PAT margins of 1.62% only which leaves no room of safety in case of adverse situations. Also, the business is cyclical in nature and the commodity prices have a characteristic of high volatility,” he added. Meanwhile, the IPO of Veranda Learning Solutions opens tomorrow. 

 

 

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