Uma IPO List: Shares of the agricultural and commodities trader started trading at Rs 80 per share, up 17.65 percent from the top of the IPO price band of Rs 68 per share. The market cap of Uma Exports rose to Rs 276.56 crore. In total, 4.69 lakh shares of the company have changed hands, representing a turnover of Rs 3.77 crore on the BSE. On NSE, the stock is listed at Rs 76, up 11.76 percent from the IPO issue price. The market cap of the company rose to Rs 269 crore. A total of 9.73 lakh shares of the company have changed hands, representing a turnover of Rs 7.79 crore on the NSE.
The company successfully raised Rs 60 crore through its first public issuance subscribed for 7.67 times over the course of March 28-30, 2022. The issuance received good response from investors with the retail portion subscribed for 10.11 times while qualified institutional buyers and non-institutional investors bid 2.81 and 2.22 times the allocated quota, respectively.
The company will use the issuance of the proceeds for working capital requirements. The price range for the offer was Rs 65-68 per share share.
At the top price range, the company sought a market cap of Rs 229.9 crore, while its peer Sakuma Exports traded at a market cap of over Rs 330 crore.
Uma Exports is engaged in the trading and marketing of agricultural products and commodities such as sugar, spices such as dried red peppers, turmeric, coriander, cumin seeds, food grains such as rice, wheat, maize, sorghum and tea, pulses and agricultural feeds such as soy flour and with rice bran defatted cake.
What do brokers say?
All brokerages had an ‘avoid’ rating on the issuance given the expensive valuations, high leverage and low margin profile.
Mardwadi Financial Services had an ‘Avoid’ rating on the matter as the company operates in a competitive environment with a low margin profile and does not offer much value to the investors. “Given the FY21 adjusted EPS of Rs 3.63 on a post-issue basis, the company will trade at a P/E of 18.71x with a market cap of Rs 2,299 million, while its counterpart Sakuma Exports is trading at a P/E of 16.20x,” they added. Uma Exports posted a net profit of .
On September 30, 2021 and March 31, 2021, the company’s outstanding total debt based on funds was Rs 5,628.20 lakhs and Rs 3,861.81 lakhs respectively, Hem Securities highlighted in a note. “Companies engaged in trading and marketing agricultural products and commodities have debt on the books. While the company’s other ratios such as margin and return on shareholder fund are better than its peer, but taking into account the company’s profile and debt condition, we recommend ‘Avoid’ at this point she added.
dr. Ravi Singh, Vice President and Head of Research, Share India, said: “Given the high debt in the book and the low margin, we advise investors to avoid the Uma export IPO. The company’s expensive valuations don’t offer much value to investors.”
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