Freshara Agro IPO Price Band Set at ₹110 to ₹116 Per Share! IPO Opens on 16-Oct-24

Freshara Agro Exports Limited, formerly known as Freshara Picklz Exports, was established in 2015. The company procures, processes, and exports preserved Gherkins and other pickled goods from India to various countries across the world. Under a contract farming program, the company exports raw produce from local farmers in Tamil Nadu, Karnataka, and some parts of Andhra Pradesh. 70% of the produce is "not ready-to-eat" and is supplied directly to factories for further processing and conversion into finished products. The remaining 30% is supplied to food brokers and traders in the international market. As of 31st March 2024, the company processes and exports pickled vegetables in 3 different packaging categories: industrial packaging in food-grade drums and pails, food packaging in plastic buckets and tin cans, and retail packaging in glass jars and tin cans. The company's products include gherkins, baby corn, jalapenos, and other pickled vegetables. Freshara Agro Exports is accredited by leading organisations, including the Food Safety and Standards Authority of India (FSSAI), the United States Food & Drug Administration (FDA), Star-K Kosher, Agricultural and Processed Food Products Export Development Authority (APEDA), International Featured Standards, and Brand Reputation through Compliance Global Standard (BRCGS). As of 30th September 2024, the company had a total of 135 employees.

The Objectives of the Issue

Freshara Agro Exports Limited intends to utilise the net proceeds from the issue towards the following objectives:

• To meet the Capital Expenditure
• Funding the working capital requirements of the company
• To meet the General Corporate Purposes
• To meet the Issue Expenses

Highlights of Freshara Agro IPO

Freshara Agro IPO is set to launch with a book-built issue of ₹75.39 crores. The issue is entirely a fresh issue. Here are the key details of the IPO:

• The IPO opens for subscription on 17th October 2024 and closes on 21st October 2024.
• The allotment is expected to be finalised on 22nd October 2024.
• Refunds will be initiated on 23rd October 2024.
• Credit of shares to Demat accounts is also expected on 23rd October 2024.
• The company will tentatively list on NSE SME on 24th October 2024.
• The price band is set at ₹110 to ₹116 per share.
• The fresh issue comprises 64.99 lakh shares, aggregating to ₹75.39 crores.
• The minimum lot size for the application is 1200 shares.
• Retail investors need to invest a minimum of ₹139,200.
• The minimum investment for HNI is 2 lots (2,400 shares), amounting to ₹278,400.
• GYR Capital Advisors Private Limited is the book-running lead manager for the IPO.
• Purva Sharegistry India Pvt Ltd serves as the registrar.

Freshara Agro IPO - Key Dates

The cut-off time for UPI mandate confirmation is 5:00 PM on 21st October 2024. This deadline is crucial for investors to ensure their applications are processed successfully. Investors are advised to complete their applications well before this deadline to avoid any last-minute technical issues or delays.

Freshara Agro IPO Issue Details/Capital History

Freshara Agro IPO is scheduled from 17th October to 21st October 2024, with a price band of ₹110 to ₹116 per share and a face value of ₹10. The total issue size is 64,99,200 shares, raising up to ₹75.39 crores through a fresh issue.

The IPO will be listed on NSE SME. The pre-issue shareholding is 1,70,00,000 shares, and the post-issue shareholding will be 2,34,99,200 shares. The company has raised ₹20.43 crore from anchor investors, with 17,61,600 shares allocated to them.

Freshara Agro IPO Allocation & Minimum Investment Lot Size

The IPO shares are allocated across different investor categories as follows:
 

Investors can place bids for a minimum of 1200 shares, with additional bids required in multiples of this figure. The table below illustrates the minimum and maximum investment amounts for retail investors and HNIs, expressed in shares and monetary values.

SWOT Analysis: Freshara Agro Exports Ltd

Strengths:

• Good relationships with contract farmers and other suppliers
• Efficient supply chain enabling long-term customer relationships
• Quality assurance and control with various awards and accreditations
• Advanced in-house processing facilities
• Comprehensive product portfolio

Weaknesses:

• Dependency on specific geographical regions for raw materials
• Limited product range compared to larger competitors

Opportunities:

• Growing demand for processed and pickled foods globally
• Potential for expansion into new international markets
• Diversification of product range

Threats:

• Regulatory changes affecting food export industry
• Climate-related risks affecting crop yields
• Intense competition in the global food export market

Financial Highlights: Freshara Agro Exports Ltd

Below are the financial highlights of the company:

Freshara Agro Exports Limited has shown significant growth in recent years. The company's revenue increased by 56%, and profit after tax (PAT) rose by 140% between the financial year ending on 31st March 2024 and 31st March 2023.

Revenue has seen substantial growth, rising from ₹11,840.68 lakh in FY22 to ₹19,801.58 lakh in FY24, marking an impressive increase of 67.2% over two years.

The company's profitability has improved significantly. Profit After Tax increased from ₹97.36 lakh in FY22 to ₹2,182.41 lakh in FY24, representing a substantial growth of 2141.8% over two years.

Net Worth has shown strong growth, increasing from ₹931.58 lakh in FY22 to ₹5,958.45 lakh in FY24, which represents an increase of about 539.6% over two years.

Total Borrowings have increased from ₹3,479.1 lakh in FY22 to ₹17,618.1 lakh in FY24, which represents an increase of about 406.4% over two years.

The company's financial performance shows a trend of strong revenue growth and significantly improving profitability. The substantial increase in PAT and Net Worth indicates a strengthening financial position. However, investors should note the significant increase in borrowings, which may be related to expansion activities. Investors should evaluate these financial trends along with the company's market position and future growth prospects when considering the IPO.