What You Should Know About Mukka Proteins Ltd IPO Before Investing?

Key Highlights:

• Mukka Proteins Ltd is in the business of manufacturing fish oil, fish meal, etc.
• IPO details:
  • Opening date: 29th February
  • Closing date: 4th March
  • Price band: Rs 26 to Rs 28
  • Total shares offered: 160,000,000
• Evaluate the valuations and the risks carefully before investing

Mukka Proteins Ltd is one of the leading manufacturers of fish oil, fish meal and fish soluble paste. These are essential ingredients in manufacturing aqua feed, poultry feed and pet food. It sells its products in India and also exports them to over 10 countries. Some countries where the company exports its products are Chile, Bangladesh, China, South Korea, Oman, Malaysia, Vietnam, etc.

The company is coming out with its initial public offering (IPO) on 29th February 2024. This blog captures some essential things you should know before investing in this IPO.

• Offer details Through the IPO, Mukka Proteins plans to raise Rs 224 crores. The price band for the issue is between Rs 26 - Rs 28, and a total of 160,000,000 shares are on offer. The company will go public on 4th March 2024 and will be listed on the BSE and NSE. You can bid for a minimum of 535 equity shares and in multiples thereof.

• Issue objectives The company plans to use Rs 120 crores from the proceeds received to meet its working capital needs. It intends to allocate Rs 10 crore to meet the working capital needs of its associate company, Ento Proteins. It plans to use the remaining funds for general corporate purposes.

• IPO allotment structure While 50% of the IPO is for qualified institutional buyers (QIBs), 15% is for non-institutional investors (NIIs). 35% is for individual investors.

• Company financials For FY 22, the company achieved a net consolidated profit of Rs 25.8 crore. This is a substantial increase from Rs 11.01 crore in the previous year. Revenue from operations during the same period increased to Rs 770.5 crore from Rs 603.8 crore. In the first nine months of FY 23, ending December, the firm recorded a net profit of Rs 25.6 crore.

• Risks involved As an investor, you need to know about the key risks associated with any company before investing in its IPO, and Mukka Proteins is no different. Some of the key risks are as follows:

  • The company has recently forayed into the insect protein business. It may be unable to expand its business in this domain, which could materially affect its business and financial conditions.
  • Most of its revenues come from selling fishmeal in India, Japan, Vietnam and China. If there are adverse developments or changes in the demand for products or consumption patterns in these countries, it can impact the company's profitability.
  • The company procures its supplies from limited suppliers and has no formal long-term arrangements with raw materials suppliers. Variations in the supply can affect the company's financials.

Should you invest?

Mukka Proteins Ltd operates in a domain where there is considerable government support. The Indian government's Pradhan Mantri Matsya Sampada Yojana (PMMSY) aims to bolster the country's fisheries sector. Also, fish meal and fish oil are rich protein sources and vital fatty acids and are in high demand in the aquaculture industry.

Strong financials coupled with increased demand for animal proteins position the company to make significant gains in the coming days. That said, evaluate the valuations correctly before investing. If you want to invest in Mukka Proteins Ltd IPO, you can do so with Kotak Securities app. Log in with your credentials and visit the IPO section to invest.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consult with financial professionals before making any investment decisions